Republican lawmakers Thursday night delayed a vote on a key budget deficit plan aimed at avoiding a potential US default. The House of Representatives is scheduled to meet again Friday morning.
AP - Republican leaders in the House of Representatives, facing a conservative revolt, put off a vote Thursday night on a bill to increase the government’s debt limit, cut federal spending and avoid a potential U.S. default.
Republican leaders in the lower chamber announced their decision to not hold a vote Thursday night after abruptly halting debate on the legislation and plunging into an intensive round of meetings with rebellious conservatives.
The decision created fresh turmoil as a divided U.S. government riven struggled to head off a default threatened after next Tuesday that would leave the Treasury without the funds needed to pay all its bills.
One option under review was to wait for the Democratic-controlled Senate to pass legislation first, a reversal in Republican strategy that would increase President Barack Obama’s leverage.
House Speaker John Boehner and other Republican leaders had labored furiously to line up the votes the debt bill would need to pass the House. Enough conservative Republicans, initially opposed to the Boehner bill, had been thought to have agreed to back the measure earlier Thursday.
Obama has threatened to veto the House bill and Senate Democrats stood by ready to scuttle the bill - if it ever got them - as a way of forcing Republicans to accept changes sought by Obama.
The key stumbling block at this point, beyond the unexpected delay, is the House Republicans’ insistence that raising the debt ceiling, thereby preventing an unprecedented U.S. default, should be contingent upon returning to the issue early next year. That would thrust the heated issue into the midst of the 2012 election campaign. Obama, who faces re-election, has insisted that the ceiling be increased sufficiently to push the issue beyond the 2012 vote.
Democratic Rep. Debbie Wasserman Schultz savaged the House bill as a “Republican plan for default.” She said the Republicans hoped to “hold our economy hostage while forcing an ideological agenda” on the country.
The first sign of trouble for the House bill’s supporters occurred after hours of routine debate, when the Republican leadership suddenly halted work on the measure.
As the evening slipped by Boehner had summoned a string of Republican critics of the bill to his office. Later, he visited an office where lawmakers were congregating around 19 boxes of pizza that were rolled in.
With the bill in limbo, a few first-term conservatives slipped into a small chapel a few paces down the hall from the Capitol Rotunda as they contemplated one of the most consequential votes of their careers.
Asked if he was seeking divine inspiration, Republican Rep. Tim Scott said that had already happened. “I was leaning no and now I am a no.”
In the Senate, meanwhile, Majority Leader Harry Reid said the Democrat-dominated body would refuse to vote on the House bill, killing it. That would require further negotiations toward a compromise.
Fears that the deadlock on raising the country’s cap on borrowing won’t be broken forced global stock markets down yet again as investors worried that a dysfunctional Congress might remain gridlocked past the Tuesday deadline.
U.S. stocks have fallen all week. They increased modestly for much of the day Thursday before fading, with the Dow Jones industrial average declining 0.5 percent, the fifth straight daily drop. Had the delay in the House vote occurred before the market closed about two hours earlier, the effect might have been dramatic.
Without legislation in place by the Tuesday deadline, the Obama administration says the Treasury will not be able to pay all the nation’s bills, possibly triggering a default that could prove catastrophic for an economy still recovering from the worst recession since the 1930s Great Depression. That would have major global consequences for the world’s increasingly interconnected economies.
Earlier, Boehner had exuded optimism.
“Let’s pass this bill and end the crisis,” said the president’s principal Republican antagonist in a new and contentious era of divided government. “It raises the debt limit and cuts government spending by a larger amount.”
But some House conservatives still opposed the Boehner legislation and their number appeared to have been sufficient to cause the postponement of the vote.
Deciding whether to support Boehner’s plan has vexed newly empowered House Republicans more than any other question in the seven months since they assumed control of the lower chamber and promised to upend the old order in Washington.
Some in the conservative tea party movement that helped propel the Republican gains in the 2010 elections concluded that Boehner already had betrayed them by negotiating with Obama on possibly increasing government revenues - meaning taxes - as part of a debt deal.
Obama supports an alternative drafted by Reid that also cuts spending yet provides enough additional borrowing authority to tide the government over through 2012. The Senate measure does not include increased tax revenue, which had been a key Obama requirement until now.
The White House taunted Republicans as they struggled to pass their bill Thursday night.
“Another day wasted while the clock ticks, now is the time to compromise so we can solve this problem and reduce the deficit,” tweeted Obama’s communications director, Dan Pfeiffer.
Boehner’s plan has enough in common with Reid’s - including the establishment of a special congressional panel to recommend additional spending cuts this fall - that Reid hinted a compromise could be easy to pull together quickly.
Despite the sharp rhetoric, some were hopeful that the gridlock might be giving way.
“Around here you’ve got to have deadlock before you have breakthrough,” said Democratic Sen. Kent Conrad. “We’re at that stage now.”
Americans are starting to worry about whether the Treasury will be able to continue paying huge federal obligations for pensioners who rely on Social Security payments each month, benefits to military veterans or businesses large and small that do work for the government. Switchboards at Congress have been at capacity this week, slammed by constituents phoning in to be heard.
The Treasury Department moved ahead with plans to hold its regular weekly auction of three-month and six-month securities on Monday. Yet officials offered no information on what steps would be taken if Congress failed to raise the nation’s $14.3 trillion debt limit by the following day.