Congress moves to call for vote on debt limit

The US House of Representatives may hold a vote on Wednesday on the debt ceiling, according to several Republican lawmakers, as the Feb 27 deadline before a potential US default looms.

House Republicans met behind closed doors on Monday to discuss a proposal that would permit the US Treasury to continue borrowing until the end of March next year, according to several congressmen who spoke to reporters.

The official debt ceiling was reinstated late on Friday at the current borrowing level - nearly $17.3 trillion - as Congress and the White House squared off in the newest battle that could, for the fourth time in three years, push the US close to a default.

The Treasury says it can make do until Feb 27, leaving nearly three weeks for Congress to find a compromise - but less time remains than may seem, because after Wednesday, the House adjourns until Feb 25.

Republicans indicated on Monday they would demand a concession in exchange for voting to suspend the debt limit: the cancellation of a budget measure approved in December that slows the pace of raises in military pensions for certain retirees.

Other options were also envisioned.

Leaders did not officially confirm a vote would be held on Wednesday, and they seemed to want first to gauge support for the plan among Republicans more widely.

"We'll work toward a resolution this week," was all House majority leader Eric Cantor said.

The US right-wing party seemed very divided between moderates and conservatives, recalling the struggles of the last battle over the debt ceiling, in October.

"There aren't 218 votes. That's pretty clear," predicted Republican lawmaker Mo Brooks, who insisted many conservatives wanted debt-reduction measures.

"It's going to be a tough vote no matter how you slice it," said Representative Jason Chaffetz, also a Republican.

The government has a chronic budget deficit, projected at $500 billion this year, which it needs to fund through borrowing.

Democrats have said they would only vote on a "clean" bill suspending the debt ceiling - in other words, one without conditions.

On previous showdowns over the debt ceiling, businesses and investors became more cautious and US bond yields rose amid worry that the country could be forced to default on its debt.

The borrowing ceiling was last lifted in October, after a debt and budget fight that forced the temporary shutdown of much of the government.

In a similar debt ceiling showdown in August 2011, Standard & Poor's dealt the country its first-ever credit rating downgrade, citing the uncertainty created by repeated budget and borrowing battles over policymaking.

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