GOP Debt Ceiling Bill Passes House, Moves to Senate
With no amendments, the bill will suspend the federal borrowing limit until May 18, with a provision adding that if Congress does not adopt a budget by April 15, their pay will be temporarily suspended. The GOP is using this as an opportunity to negotiate for long-sought spending cuts ahead of the sequester, due in March.
The decision to vote on the measure unwound a lot of tension in the markets, but Washington’s financial uncertainty is still one of the biggest concerns for investors. A Bloomberg survey shows that nearly half of global investors are restricting their investments because of the risk that political dysfunction poses to the markets. A growing number of participants are citing the debt ceiling tension as their number one concern.
But good news these days comes in the form of cooperation on Capitol Hill. President Barack Obama is reportedly likely to sign the measure if it makes it to his desk. Democratic leaders who control the Senate have expressed begrudging support for the idea. The party would like a longer-term solution, but recognizes that if they don’t give the GOP this opportunity to negotiate for spending cuts, the alternative could mean another last-minute solution. With memories of fiscal cliff drama still fresh, most policymakers appear willing to accept the deal…