24 Jan 2013

Federal debt ceiling suspended

8:58 am on 24 January 2013

The US House of Representatives voted on Wednesday to suspend the US federal debt ceiling until May. The bill was passed 285-144.

The bill now goes to the Senate where it is expected to pass and then be approved by President Barack Obama.

AAP reports the United States surpassed its borrowing limit of $US16 trillion late last year and the Treasury has taken extraordinary measures to keep paying the government's bills until late February.

In a bid to hasten action, House Republicans added a clause to the bill to keep Senators from collecting their salaries if they don't pass a budget by 15 April.

"It's been nearly four years since the Senate has done a budget. Most Americans believe, if you don't do your job, you shouldn't get paid. That's the basis for No Budget, No Pay," House Speaker John Boehner said on Tuesday.

"It's time for us to come to a plan that will in fact balance the budget over the next 10 years."

If the bill is passed by the Senate and signed by the president, the current debt limit would be automatically extended as necessary until midnight, 18 May.

The Senate has not voted on a budget since 2009 and the federal government is being funded through temporary resolutions every six months.

Politicians have haggled for months over how to avoid a "fiscal cliff" in 2013. Marathon negotiations late last month produced a partial settlement.