White House encouraged at House plans for clean debt cap rise

WASHINGTON (Reuters) - The White House on Friday said it welcomed plans by Republicans in the U.S. House of Representatives to raise the government's debt ceiling, as long as they do not condition the increase on spending cuts.

"We are encouraged that there are signs that congressional Republicans may back off their insistence on holding our economy hostage to extract drastic cuts in Medicare, education and programs middle class families depend on," White House spokesman Jay Carney said in a statement. "Congress must pay its bills and pass a clean debt limit increase without further delay."

The House will consider a bill next week to extend the debt limit by three months in order to force the Senate to pass a budget, Republican House Majority Leader Eric Cantor said on Friday.

The White House has been skeptical about any short-term increase in the nation's borrowing limit if it were used as a bargaining wedge to force the administration into accepting spending cuts later on. The administration has insisted that while it is willing to discuss reducing government outlays, it will refuse to negotiate over raising the debt ceiling.

Carney renewed the administration's call on Congress to raise the debt independently of other fiscal dealings.

"The President has made clear that Congress has only two options: pay the bills they have racked up, or fail to do so and put our nation into default," he said. "The President remains committed to further reducing the deficit in a balanced way."

Less than three weeks after the White House and Congress averted the severe combination of tax increases and spending cuts that came to be known as the "fiscal cliff," fresh budget deadlines loom. As with the fiscal cliff, failure to act has the potential to cause a number of serious economic dislocations: a U.S. debt default, a government shutdown, further deep spending cuts to defense and non-defense programs alike.

The most immediate and most serious of the three budget bottlenecks is the need to raise the $16.4 trillion U.S. debt limit so the Treasury can continue to borrow to fund government obligations. The Treasury has said it will run out of options to allow it to borrow in mid-to-late February, raising the specter of a financial market-roiling debt default.

(Reporting by Roberta Rampton, Jeff Mason, Steve Holland and Mark Felsenthal; Editing by Vicki Allen)

Source: http://news.yahoo.com/white-house-encouraged-house-plans-clean-debt-cap-194345225--business.html

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