WASHINGTON (AP) — House Speaker John Boehner hastily rewrote his stalled
emergency debt-limit bill yet again Friday as Senate Democratic leader Harry
Reid signaled he’s ready to push ahead with his own version. President
Barack Obama declared “we’re almost out of time” in a wrenching political
standoff that has heightened fears of a market-rattling government default.
“The power to solve this is in our hands on a day when we’ve been reminded
how fragile the economy already is,” the president said from the White House
as many U.S. stocks fell in response to a sour report on economic growth and
widespread uncertainty over the Washington debt stalemate. “This is one
burden we can lift ourselves. We can end it with a simple vote.”
A simple vote was hard to come by, just a few days before Tuesday’s
On Capitol Hill, Reid pressed forward with his legislation, setting up a
showdown vote for Sunday. And Boehner moved to revise his measure in hopes
of winning over reluctant rank-and-file conservatives who argue that the
deficit cuts it contains are insufficient. The GOP leader pushed toward vote
House Republican leaders met behind closed doors with their members in a
last-ditch appeal after abruptly postponing a vote that had been expected on
Rep. David Dreier of California said the revised measure would still raise
the nation’s debt limit by $900 billion — essential to allow the government
to keep paying its bills — and cut spending by $917 billion. But a later
increase in borrowing authority wouldn’t take effect unless Congress sent a
constitutional balanced budget amendment to the states for ratification.
That was a key demand of rebellious conservatives who withheld their votes
from the legislation on Thursday night.
Freshman Rep. Mo Brooks, R-Ala., said the change on the balanced-budget
amendment “got a lot of additional Republican votes.” At least one switcher
was Rep. Jeff Flake of Arizona, who said he would now back the bill.
A divided government is struggling to break the extreme Washington gridlock
and head off a first-ever default that would leave the Treasury without the
money necessary to pay all its bills. Administration officials say Tuesday
is the deadline.
“There are plenty of ways out of this mess. But we are almost out of time,”
On the Senate floor, Reid said glumly, “This is likely our last chance to
save this nation from default.”
Reid, D-Nev., said he had invited Senate Minority Leader Mitch McConnell, R-Ky.,
to join him in negotiations. “I know the Senate compromise bill Democrats
have offered is not perfect in Republicans’ eyes. Nor is it perfect for
Democrats,” Reid said. “But together, we must make it work for all of us. It
is the only option.”
McConnell dismissed the Democratic effort, arguing that it stands no chance
in the GOP-controlled House, and he accused Obama of pushing the nation to
the brink of an economic abyss.
“If the president hadn’t decided to blow up the bipartisan solution that
members of Congress worked so hard to produce last weekend, we’d be voting
to end this crisis today,” McConnell said on the Senate floor.
“Obviously, we didn’t have the votes,” Dreier said after Boehner and the GOP
leadership had spent hours trying to corral the support of rebellious
If Republicans now can get Boehner’s version through the House, a rapid and
complex set of choices will determine whether and how a debt crisis can be
averted. House Republicans will be under tremendous pressure to pass
something, even if they have to make it so appealing to their right wing
that the nation’s independents and centrists will scorn it. As Thursday’s
events proved, nothing is guaranteed.
The main area of dispute between the two parties is how to encourage or
guarantee big spending cuts in the future without rekindling a fiercely
divisive debt-ceiling debate such as the one now raging.
Interviews with well-placed insiders suggest the following road map,
assuming Boehner can get his bill out of the House:
The Democratic-controlled Senate would kill it quickly. The focus then would
fall on the Senate’s two leaders, Reid and McConnell. They must decide
whether they can reach a compromise that can pass the Senate — where a
united GOP can kill bills with filibusters — and then pass the House and be
signed by Obama. The White House would be integral to such talks.
Republican officials say McConnell could hold a strong hand, despite the
House’s shaky performance. He could argue that the House finally passed a
bill to raise the debt ceiling, while the Senate has done nothing but kill
that bill. If Tuesday’s deadline passes with no resolution, Republicans say,
voters will blame Democrats.
Under this thinking, the Senate would pass a measure similar to the House
bill, perhaps with minor changes to save face and give political cover to
Democrats who vote for it. The House would quickly concur, with numerous
Democrats and all but the most conservative Republicans voting aye. Obama
would have no choice but to sign it.
Democrats say the opposite is true. Obama has persuasively argued in recent
weeks that Republicans are unreasonably demanding, they say.
Democrats control the Senate and White House. If Republicans insist that a
partisan, House-passed bill is the only vehicle, then public anger will fall
on them, this thinking goes.
The biggest sticking point is the House bill’s call for congressional votes
to raise the debt ceiling, in two stages, before the 2012 elections.
A $900 billion debt-limit hike would come first, coupled with $917 billion
in spending cuts over 10 years. Under the Boehner revision, approval of a
balanced-budget constitutional amendment would open a path to another $1.6
trillion in borrowing power, provided that Congress and the president have
agreed to another round of spending cuts of that amount or more.
Obama has consistently rejected this condition. He says it would hurt the
economy and touch off another ferocious political fight over the debt
ceiling, which Congress previously raised with little fuss year after year.
Global markets and investors would not be reassured by such a drawn-out,
uncertain scenario, he says.
The White House says the prospect of an economically devastating default
must not be used as the “trigger” to force Congress to cut the deficit. Such
triggers would take effect automatically if Congress did not act on a
prescribed deficit-reduction package.
Those could include deep cuts in programs such as Medicare and Medicaid,
which would be painful to Democrats, and tax increases that Republicans
would be loath to accept. But Republicans believe the threat of default is a
much stronger incentive to shrink the deficit.
Presidential adviser David Plouffe told MSNBC on Thursday that the
Republican House bill would “have this whole debt ceiling spectacle,
three-ring circus ... repeated again a few months from now, over the
holidays. You know, the debt ceiling debate would ruin Christmas.”