Conservative Republicans of the U.S. House of Representatives showed signs Wednesday that they might be willing to ease their stance on not raising the debt ceiling just enough to keep the country from going into default.
This development began taking shape in the midst of the government shutdown that started on October 1 which is the beginning of the Fed’s fiscal year.
The plan, introduced by Rep. Paul Ryan (R-Wisconsin), would call for the debt ceiling to be raised for a temporary period of four to six weeks. It also calls for intensified talks to begin with the aim of reducing the deficit. If those talks are effective and conducted in good faith then further extensions of raising the debt ceiling would be allowed and for longer durations.
Lawmakers have until October 17 to come to an agreement as to what to do with the debt ceiling. Conservative House Republicans want to keep it from rising any higher. However, not raising it puts the country at a risk for defaulting on its debt—something no one in the government as well as the developing world wants to see.
House Republicans want to get the U.S. deficit under control by taking the stance that the government should take other cost cutting measures instead of borrowing. However, U.S. Treasury Secretary Jack Lew has stated that after October 17, the U.S. Government will not be able to borrow unless the current $16.7 trillion cap on the debt ceiling is raised.
Currently, there is gridlock between conservative House Republicans, the Democrat-controlled Senate, and President Obama which led to the government shutdown.
House Republicans will not approve a budget for the fiscal year that began on October 1 and neither will it approve an increase in the debt ceiling unless implementation of Obamacare is delayed by one year. Mr. Obama and Senate Democrats want Republicans to approve the budget and raise the debt ceiling before they will negotiate on Obamacare.
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