Americas

Americas

White House delaying debt ceiling request

31 December 2011 04:46 (UTC +04:00)

Baku-APA. President Barack Obama has agreed to delay submitting a debt ceiling increase request until next month to allow lawmakers time to consider it while they are in session, the White House said on Friday, APA reports quoting Reuters.

Under an August deal between Obama’s Democrats and the Republicans, Congress is unlikely to block the expected $1.2 trillion increase request, ensuring that the debt limit will not be reached again until after November’s presidential election.

"We have been asked by the bicameral leadership of Congress to delay certification in order to give both houses time to consider when the votes may occur, given the current congressional schedule," said White House spokesman Josh Earnest.

"The president has agreed to Congress’ request to delay submission of the certification," Earnest told reporters in Hawaii, where Obama is vacationing with his family. The House of Representatives is out of session until January 17.

The Treasury had said on Tuesday that Obama would likely seek authority before week’s end to raise the borrowing limit by $1.2 trillion, under an agreement negotiated between Congress and the White House this past summer.

Congress has 15 days to vote on a resolution of disapproval for the debt limit hike once Obama submits the notification, but the president would be able to veto any such vote.

Democrats and Republicans fought all year over the best way to control the country’s debt and deficit and the debate will help define the 2012 presidential election campaign.

Republicans want to curb the deficit by concentrating on controlling government spending, while Democrats demand that higher tax revenues must be part of any solution.

In particular, Obama favors allowing Bush-era tax cuts for wealthier Americans to expire in 2013 to help reduce the deficit over time, and has tried to paint Republican resistance to his plan as proof they back the rich over the middle class.

Republicans say higher taxes discourage small businesses from hiring, reinforcing their message Obama does not know how to cut unemployment, which was 8.6 percent in November.

A White House official said the delay in requesting the borrowing increase would be for days, not weeks, and that the Treasury Department would be able to use accounting measures to avoid hitting the debt limit.

The debt had been projected to fall within $100 billion of the current cap by Friday, when the United States has $82 billion in interest on its debt and payments such as the Social Security retirement program coming due.

The credit-worthiness of the United States would not be in question because of the filing delay, the official said.

Standard and Poor’s Rating Services cut the cherished U.S. AAA debt rating last summer over concern that the country lacked the political will to tackle its long-term deficit problems.

The debt limit currently stands at $15.194 trillion and would increase to $16.394 trillion with the request. Obama officials have said that would cover the country’s borrowing needs until after the election.

Under the August deal, the borrowing cap is raised automatically unless Congress musters a two-thirds majority in both chambers to block the extension. With Democrats holding a majority in the Senate, that prospect looks unlikely.