Debt Ceiling Will Be Suspended Until March 15

Only Senator Ted Cruz and the tea party Republicans think the threat of adebt default is a good tool to force the government to cut spending. However, there aren't enough of them to wield this ax.

Yesterday, House Speaker John Boehner passed a bill to suspend the debt ceiling until March 15 without any attachments, riders or insistence that Obamacare be defunded. He didn't have 218 Republican votes to do so. Instead, he passed it with 193 Democrats, and 28 Republicans.

Boehner was in no mood to repeat the debt ceiling crises of 2013 and 2011. The Republicans were hurt politically by that debacle last fall, when the government was shut down for 16 days. However, he was severely criticized by tea partiers in the House, who called it a "...complete capitulation on the Speaker's part and demonstrates that he has lost the ability to lead the House of Representatives." For more, see Fox News, Boehner Says House to Pass Clean Debt Limit Hike.

Now the bill is in the Senate, and Majority Leader Harry Reid will get it passed, especially with another snowstorm coming. Seantor Cruz will press for a 60-vote majority, and now there's enough non-tea party Republicans to pass it.

How It Affects You

This clean passage means the government won't manufacture another crisis, like it did in last fall. This removes a major unknown, which the stock market and businesses like.  That's a big plus for economic growth.

Suspending the debt ceiling means the U.S. Treasury won't be forced to pay all bills out of cash on hand. It can issue as many Treasury bills, bonds and notes as it wants until March 15. That's great, as long as demand stays as strong as it currently is, and interest rates stay low. When the value of Treasuries fall, it forces interest rates up. For more on this, see Treasury Yields.

via:http://useconomy.about.com/b/2014/02/12/debt-ceiling-will-be-suspended-until-march-15.htm