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Sometime in October: That's the latest estimate of when the federal government will run into trouble paying its bills - that is, if Congress fails to raise the debt limit before then. Well, today, House Republicans passed a bill that would make sure the nation's debt payments are made if it comes to that. NPR congressional correspondent Tamara Keith reports.
TAMARA KEITH, BYLINE: Here's what House Republicans want you to know.
REPRESENTATIVE TIM GRIFFIN: Nobody wants to hit the debt ceiling. In fact, no one wants to get anywhere near it.
KEITH: That's Congressman Tim Griffin, a Republican from Arkansas on the House floor earlier today speaking in favor of the Full Faith and Credit Act.
GRIFFIN: This bill requires - not allows - requires Treasury to continue to pay principal and interest on existing debt if and only if we hit the debt ceiling before a deal is reached. This is a backstop that takes default off the table.
KEITH: Democrats have a different name for the bill.
REPRESENTATIVE JOE CROWLEY: The Pay China First Act.
KEITH: Joe Crowley is a Democrat from New York. The idea is that to prioritize debt payments, including to China and other countries that own our debt, you'd have to short Americans on payments they are owed.
CROWLEY: My colleagues, please, put Americans first. Put our troops first and China last. Do not pass the Pay China First Act.
KEITH: While his Democratic colleagues listened, the bill passed on Republican votes alone. The Senate is unlikely to take it up. Former Treasury officials from both Democratic and Republican administrations say prioritization is a bad idea that probably wouldn't work to ease the anxiety of creditors if, like in 2011, Congress took a fight over the debt limit to the brink. Michael Barr is a law professor at the University of Michigan and worked in the Treasury Department under Presidents Clinton and Obama.
MICHAEL BARR: Well, we might be paying a mortgage, but we're defaulting on the credit card. Anybody who's looking at what the government is doing will see that the government is not paying the bills that it owes, and that is just a crazy way of running a great country.
KEITH: But he says there's an easy way out of this.
BARR: Congress should pass a law that permits the government to pay its bills. It's really quite simple. Everything else is what's complicated and hard.
KEITH: The everything else is the politics. Two years ago, Republicans refused to raise the debt limit without an equal amount of spending cuts. Now, many in the party see the debt limit as leverage. But it's not clear yet what they want to try to get with that leverage. At his weekly press conference, House Speaker John Boehner indicated they're still trying to figure that out.
REPRESENTATIVE JOHN BOEHNER: We're going to have a big conversation with our members next week to talk about a way forward. You know, what do our members believe is necessary in order to allow them to vote yes on increasing the debt limit?
KEITH: There's a feeling that increasing the debt limit in 2013 won't blow up like it did in 2011. That standoff resulted in a credit rating downgrade and record low congressional approval ratings. Earl Blumenauer, an Oregon Democrat, is on the House budget committee.
REPRESENTATIVE EARL BLUMENAUER: I suspect while there are a few that would go over the cliff, in their heart of hearts, I think there are a number of people who really don't think it's such a good idea and hope that it can somehow be unwound.
KEITH: And they'll have a little bit more time to work on it. Steve Bell is at the Bipartisan Policy Center, which has been closely tracking the daily cash flow at the Treasury to figure out the real deadline.
STEVE BELL: That's what we call the X date. That's the date when the United States government cannot pay on time and in full all of its obligations for that day.
KEITH: The X date is now most likely sometime in October. For what it's worth, that date is several months later than originally thought and after the long August recess. The reason? The slowly improving economy, and the fiscal cliff deal mean more tax receipts, and the automatic spending cuts of the sequester mean less spending. Tamara Keith, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.
