Senate Democratic leaders announced Wednesday that they plan to accept the House GOP plan to extend the Treasury's borrowing authority, committing themselves to approving a budget outline this spring and putting off any potential default on the nation's swelling debt until well into the summer.
About an hour before the House's expected passage of the new plan, Senate Majority Leader Harry M. Reid (D-Nev.) and his leadership team formally said that they would accept the latest offering from House Speaker John A. Boehner (R-Ohio), in large part because Boehner had dropped his previous demands that every dollar in increased borrowing authority be met with a corresponding dollar in spending cuts.
"We will not hold the full faith and credit of the United States hostage," Reid told reporters, vowing "regular order" to bring a budget to the Senate floor for the first time since 2009.
Boehner's team, which has struggled to corral its caucus behind past compromises, believes it has finally unified the rank-and-file behind the proposal to lift the debt ceiling until May 19 in exchange for demands that the Senate and House approve budgets. This is meant to set up an attempt at what insiders call "regular order," in which House Budget Chairman Paul Ryan (R-Wis.) will attempt to negotiate a deal with Senate counterparts to start the process toward tax and entitlement reform.
It's a recognition that the past two years of negotiating -- lurching from crisis to crisis, often with President Obama and Boehner getting close but then faltering on a deal, leading to last-minute intervention by Senate leaders -- have been a political and policy disaster for the House GOP.
Assuming the House passes the new plan, the Senate could act within the next week. That would come almost a full month before the next debt-ceiling limit is slated to hit, an unusual accomplishment for a congressional leadership that has seemed to thrive on 11th hour deals after weeks of ugly finger-pointing negotiations.
"For four years, with our economy on the line, they did nothing. With their paychecks on the line for one week, they're springing into action," Rory Cooper, spokesman for House Majority Leader Eric Cantor (R-Va.), said in reaction to the Senate announcement.
The new timeline would suspend the current limit of $16.4 trillion in debt and allow Treasury to continue borrowing through May 18, and the next day Treasury could begin using extraordinary measures to manage the debt until July or August.