WASHINGTON, USA – THE United States appeared to avoid another last-minute showdown over a possible default after leaders of the Republican-run the House of Representatives said they would allow a vote on increasing the Government’s borrowing authority without demanding concessions from Democrats.

House Speaker John Boehner said he expected virtually all of President Barack Obama’s Democratic allies to vote for the so-called clean debt cap increase in a vote Wednesday.

Last October, amid a partial Government shutdown, the US came close to an unprecedented default before Congress approved a

short-term debt limit increase. Such increases are needed for the Government to pay its bills on time and are normally routine, but the matter became embroiled in failed Republican efforts to defund Obamacare, as the president’s health care program is known. The effort backfired, as Democrats refused to alter Obamacare and public support for Republicans plummeted.

Tuesday’s developments amount to a bitter defeat for the Republicans, who have sought to use must-pass debt ceiling measures as leverage to force spending cuts on Democrats. Republicans won more than US$2 trillion in spending cuts in a 2011 showdown, but gave Obama two debt limit increases last year with only modest add-ons.

Ahead of November Congressional elections, both political parties have backed off the bitter fiscal battles that have gripped Washington in recent years. Facing a tough battle over control of the Senate in particular, neither party wants to shoulder most of the blame for Washington’s dysfunction.

Boehner announced the plan after a poll of the Republican rank and file failed to show enough support for a strategy aimed at tying the hike in the debt limit to a plan to reverse a recently passed cut to military pensions.

“We’ll let the Democrats put the votes up. We’ll put a minimum number of (Republican) votes up to get it passed,” Boehner said. “We’ll let his party give him the debt ceiling increase that he wants.”

Boehner said he expected virtually all of Obama’s Democratic allies to vote for the so-called clean debt cap increase but that he would be one of the few Republicans to also back it in a vote on Wednesday. Such maneuvers are rare in the House, where the majority party normally refuses to advance any bills that don’t have their own party’s backing — a so-called majority of the majority.

Time is running out for lawmakers to act to lift the debt limit. Treasury Secretary Jacob Lew told lawmakers last week that Treasury will exhaust by February 27 its ability to employ accounting maneuvers to borrow to pay its bills.

Lew told congressional leaders Monday that he

had begun tapping two

large Government worker retirement funds to clear room under the debt limit. Lew announced he would suspend payments to these two pension funds and would also draw down investments made in the funds. Previous Treasury secretaries have also employed this bookkeeping maneuver. Once Congress approves a new debt ceiling, the Treasury makes the funds whole by replacing the withdrawn funds and lost interest earnings.

Boehner’s announcement came after a plan hatched on Monday to reverse a recently passed cut to military pensions as the price for increasing the Government’s borrowing cap got a rocky reception from skeptical conservatives.

“Right now we’ve got a debt ceiling bill that increases spending, which is diametrically 180 degrees opposite of what we were battling over just two years ago — where the question was how much in spending cuts we were going to get,” said Rep Mo Brooks, an Alabama Republican.

Now, rather than trying to win over unhappy Republicans for the debt ceiling vote, Boehner will rely on Democrats on Wednesday to pass a “clean” increase in the borrowing cap through March of next year.

“I would expect virtually every Democrat to vote for it,” Boehner said, adding that Democratic House Minority Leader Nancy Pelosi promised him sweeping Democratic support.

Raising the limit is needed so the Government, which ran a US$680 billion deficit last year, can borrow enough to pay Social Security benefits, interest payments on the accumulated debt and Government salaries, among other bills. Both Democrats and Republicans agree that failing to do so could spark a disaster in financial markets.

— AP