Members of the Republican Party staunchly opposed raising the debt ceiling unless spending cuts would parallel the bill, including defunding the Affordable Care Act.
After the passing in early January 2013 of the American Taxpayer Relief Act of 2012 to avert the projected fiscal cliff, political attention shifted to the debt ceiling.
[2] The debt ceiling had technically been reached on December 31, 2012, when the Treasury Department commenced "extraordinary measures" to enable the continued financing of the government.
Additionally, the company stated that "In Fitch's opinion, the debt ceiling is an ineffective and potentially dangerous mechanism for enforcing fiscal discipline.
This proposal found support from some economists such as Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics.
A survey of 38 economists found that 84% agreed that a separate debt ceiling that is periodically increased could lead to uncertainty and poor fiscal outcomes.
[11] In mid-January, Paul Ryan, Chairman of the House Budget Committee, floated the idea of a short-term debt ceiling increase.
He argued that giving Treasury enough borrowing power to postpone default until mid-March would allow Republicans to gain an advantage over Obama and Democrats in debt ceiling negotiations.
[citation needed] On February 4, 2013, President Obama signed into law the "No Budget, No Pay Act of 2013", which suspended the U.S. debt ceiling through May 18, 2013.
[15] In the House, Republican representatives attached a provision to mandate the temporary withholding of pay to members of Congress if they did not produce a budget plan by April 15.
[16] Under the law, the debt ceiling would be set on May 19, 2013, to a level "necessary to fund commitment incurred by the Federal Government that required payment.
Other organizations, including the Congressional Budget Office (CBO), projected exhaustion of the extraordinary measures in October or possibly November.
The bill also included a one-year delay in implementation of the Patient Protection and Affordable Care Act, a requirement for both houses of Congress to vote on tax reform plans by the end of 2013, and a fast-track process to begin construction of the Keystone XL Pipeline.
[25] In early October 2013, the House drafted a bill that would raise the debt ceiling without conditions through November 22, but keep the partial government shutdown in place.
It set up a House–Senate budget conference to negotiate a long-term spending agreement, and strengthened income verification for subsidies under the Patient Protection and Affordable Care Act.
Under the resolution, the debt ceiling debate and partial government shutdown were postponed, with federal workers returning to work on October 17.
[33] According to a Morningstar analysis[34] of debt-ceiling and government shutdown situations, the U.S. stock market remained relatively unchanged during the 2013 crisis period.