Along with extending the debt ceiling, the bill will also suspend lawmakers’ paychecks if they fail to pass a budget by April 15. The bill is expected to pass the Democratic-majority Senate as well; Democratic leaders have said they would accept the offer. The White House has also said that while it isn't the best solution, the administration will not fight the bill.
Approval from both chambers means that the nation has approximately three months in which to draft a plan to avoid a potential default. The U.S. has never defaulted on its debt, and to do so would have ruinous consequences that extend beyond American borders, economists said.
The Treasury is expected to hit the $16.4 trillion ceiling between mid-February and early March.
Though there is a brief reprieve, the vote for an extension does nothing to fix underlying fiscal problems. Billions in spending cuts will hit on March 1 and the continuing resolution, which deals with appropriations, will expire on March 27, failing agreements to avoid it.
House Minority Leader Nancy Pelosi, D-Calif., urged a no vote for the GOP measure Wednesday, saying that Republicans are putting the stability of the economy on the line. She said that families and businesses are met with fiscal uncertainties too often and that real, long-term solutions must be found.
“Three months? Where’s the certainty in three months?” Pelosi asked. “The fact is that that is a path to even more problems – a path to another cliff.”
Pelosi dismissed the Republican bill as a “joke,” arguing that the "no budget, no pay" language -- Congress members would not be paid unless they reach an agreement -- is something that shouldn’t have been included in the bill to begin with.
“This proposal is a missed opportunity,” she said. “This proposal does not have certainty. It doesn’t have growth and it doesn’t have my support.”
More than 100 Democrats opposed the measure, calling it a “gimmick” because they see it as nothing more than a short-term fix.
Rep. Robert Andrews, D-N.J., told lawmakers that the bill is trying to ease Americans’ worry by telling them “the government is going to pay all their bills until May 19.” But he said all the Republican legislation does is creates another fiscal cliff.
“Fiscal cliffs are the problem, not the solution,” he said.
Rep. Candice Miller, R-Mich., countered House Democrats by pointing out the disconnect between them and their Senate counterparts. She argued that the GOP’s offer gives time for a budget to be passed.
Earlier Wednesday, Senate Democrats voiced their commitment to the Republican bill, because House Speaker John Boehner, R-Ohio, backed away from previous demands to have every dollar in increased spending matched by spending cuts.
“We will not hold the full faith and credit of the United States hostage,” said Senate Majority Leader Harry Reid, D-Nev., as reported by the Washington Post.
Following the vote, Reid issued a statement, saying he is pleased with the outcome. “[They] pass a bill that defuses yet another fight over the debt ceiling,” Reid said. “This bill surrenders the hostage Republicans have taken in the past by decoupling the full faith and credit of the United States from cuts to Social Security and Medicare, or anything else. In substance, this is a clean debt limit increase that will set the precedent for future debt ceiling extensions. By passing this bill, Republicans are joining Democrats to say we will not hold the full faith and credit of the United States hostage, and we will pay our bills.
“I want to give credit where credit is due, and thank Speaker Boehner for his leadership here in defusing another fight over the debt ceiling,” he continued. “The middle class has been telling us they do not want another crisis, and this bill gives them the security they deserve.”
Powerful Sen. Charles Schumer, D-N.Y., also welcomed the House bill as "something we can work with."