President Obama has signed Congress’ temporary debt ceiling suspension into law, including the “No Budget, No Pay” provision.
The law will lift the current debt limit of $16.4 trillion through May 18, allowing the federal government to continue borrowing to pay its bills until then. It also prohibits lawmakers from getting paid should they fail to pass a fiscal 2014 budget. The funds would be held in an escrow account until the budget was passed. If an agreement is not reached, the salaries would resume at the start of the 114th Congress in January 2015.
The legality of No Budget, No Pay has been questioned, as the 27th Amendment to the U.S. Constitution prohibits a sitting Congress from altering its own pay. It can only change future legislative sessions’ salaries. But supporters of the provision say it does not change the rate of pay, just temporarily withholds it. Rank-and-file lawmakers currently make $174,000 annually.
Congress will likely have more flexibility than the May 18 deadline, as Treasury can take “extraordinary measures” that will give it until August before it defaults. One of the measures the government has often used is halting the daily reinvestment of the government securities (G) fund, the most stable offering in the Thrift Savings Plan. Treasury must refill all lost funds once a debt ceiling agreement is reached.