House GOP leaders had won narrow approval of a plan to raise the federal debt limit Friday after revising the measure to appeal to rebellious conservatives, but it was quickly shot down in the Senate, where Democrats began pushing their own plan to avert a national default.
Heading into the final weekend before the Treasury expects to begin running short of cash to pay the nation’s bills, Reid introduced a new version of his plan to grant the government additional borrowing authority into 2013, setting up the crucial Sunday morning vote in the Senate.
Democrats conceded that they still lack the votes to repel a GOP filibuster. Reid beseeched his Republican counterpart, McConnell, to join him in reworking the measure so the Senate could pass it and send it back to the House before slumping financial markets open Monday morning.
But in a phone call Friday evening, McConnell told Reid he wanted the White House at the table and expressed frustration that President Obama had rejected an emerging compromise between the two Senate leaders last weekend. Aides said McConnell expected to speak with administration officials Friday night and tamped down talk of an impasse. But Senate Democratic leaders reacted with outrage, accusing McConnell of blocking a deal.
“Unless there is a compromise or they accept my bill, we’re headed for economic disaster,” Reid said.
The late-night jousting in the Senate followed a vote on House Speaker John A. Boehner’s debt-limit measure, which would extend the Treasury’s borrowing power until early next year and force another economy-rattling fistfight within a few months.
Drafted largely by aides to Reid and McConnell last weekend, the measure was originally designed to appeal to the more centrist Senate. But Boehner (R-Ohio) could not rally enough support from his tea-party-influenced caucus and had to rewrite it at the 11th hour to add a provision that would compel Congress to adopt a constitutional amendment requiring a balanced federal budget.
The change swayed a handful of holdouts, and the measure passed 218 to 210, with every Democrat and more than 20 Republicans voting no. But the episode was a loss of face for the speaker and his leadership team, demonstrating a lack of clout within their own conference. Even their allies in the Senate were stunned.
“Yes, people can be critical of what we’ve done, but where are the other ideas?” Boehner said on the House floor. “At this point in time, the House is going to act and we’re going to act together.”
Ultimately, it was for naught. Within two hours, the Senate tabled the measure, 59 to 41, with six conservative Republicans joining all 53 senators in the Democratic caucus in voting against the bill.
Throughout the day, senators in both parties held out hope for a bipartisan compromise to resolve the relatively small, but significant, differences between the House and Senate bills.
“We’ve gone through all this acrimony. It’s been painful for everybody to watch, I know,” said Sen. Bob Corker (R-Tenn.) “But I’m very confident that soon we’re going to get to a place where we’ll have a bill that can pass both chambers. And I’m totally confident that the American people have nothing to worry about as it relates to Tuesday.”
Before the House vote, President Obama added to the chorus calling for compromise. He argued that the two parties are not “miles apart” and that he was prepared to work “all weekend long until we find a solution.”
At their core, the House and Senate bills are strikingly similar, having emerged from the same bipartisan talks last weekend. Both call for cutting deeply into agency budgets over the next decade and creating a new 12-member committee of lawmakers tasked with identifying trillions of dollars in additional cuts by the end of this year.
But Reid’s bill would justify a larger increase in the debt limit by counting more than $1 trillion in savings from winding down the wars in Iraq and Afghanistan, savings Republicans dismiss as an accounting gimmick.
Boehner’s bill would give the Treasury a much shorter reprieve and require the committee to come up with $1.8 trillion in additional savings before the government could be granted additional borrowing power.
A new version of the legislation Reid unveiled Friday went a small part of the way to bridging the difference by aligning the size of the debt-limit increase and the spending cuts at $2.4 trillion. He kept the war savings, a sticking point for Republicans, but added a two-stage process for Obama to raise the debt limit without explicit congressional approval.
In brief remarks at the White House, Obama said the two sides are “in rough agreement” about the size of the first round of spending cuts and “the next step” to rein in borrowing. “If we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I’ll support that, too, if it’s done in a smart and balanced way,” Obama said.
Talks have been underway for weeks about how to structure a plan so that both parties are encouraged to engage seriously in negotiations over future debt reduction. Democrats want to require both tax hikes and across-the-board spending cuts — which would be unattractive to many lawmakers — if the committee refuses to come up with recommendations for added savings. But Republicans have rejected any trigger that includes a tax hike.
On Friday, Sen. Richard J. Durbin (D-Ill.), the second-ranking Democrat in the Senate, said the design of that mechanism “is what all the negotiations are about.” He added, “That’s going to part of the endgame.”
Without such an agreement, Obama warned that the United States stands to lose its sterling AAA credit rating — “not because we didn’t have the capacity to pay our bills. We do. But because we didn’t have a triple-A political system to match our triple-A credit rating.”
Obama again urged Americans to contact their representatives, clogging Capitol Hill switchboards for a second time this week. The White House also tweeted a number of Twitter handles for Republican lawmakers so voters could press them to “get past this.”
The president’s lobbying campaign appeared to have little effect in the House, where attempts by Boehner to move toward the center were forcefully rebuffed.
Boehner, House Majority Leader Eric Cantor (R-Va.) and House Majority Whip Kevin McCarthy (R-Calif.) had staked their personal reputations on the ability to deliver an all-Republican majority for the legislation.
They explained to their rank and file that despite broad Republican support in the House for a balanced-budget amendment, an earlier bill including the proposal could not pass the Senate. And the leaders pleaded with GOP lawmakers to support Boehner’s legislation, arguing that a majority for the bill would give McConnell leverage to push it through the Senate — or at least to force concessions from Reid.
Aides described the vote on the bill as nothing short of a vote of confidence in the leadership. All three leaders predicted victory.
But Thursday night, they were still short by as many as a dozen votes. So they pulled the bill and rewrote it to meet the demands of the conservative rebels. The balanced-budget amendment was put back into the bill.
For 23 hours, neither Boehner nor any other Republican leader issued a formal statement or paused in the Capitol hallways to explain to reporters what had happened. On Friday, a chastened Boehner spoke in favor of the rewrite and defended his earlier effort to cut a far-reaching debt-reduction deal with Obama.
“I stuck my neck out a mile to try to get an agreement with the president of the United States. I stuck my neck out a mile,” Boehner said. “But a lot of people in this town can never say yes.”
Democrats openly mocked Boehner’s inability to lead his caucus.
“He didn’t have a plan. By Tuesday, they announced they couldn’t call a vote. Well, maybe Wednesday. No, on Wednesday, they couldn’t call a vote. And then on Thursday, again, they failed to have the majority to call a vote. And so we waited,” Durbin told reporters.
Even some Senate Republicans were perplexed by the disarray in the House.
Sen. John McCain (R-Ariz.) re-affirmed his criticism of the balanced-budget amendment as “bizarro.”
And Sen. Roy Blunt (R-Mo.), who served under Boehner in House leadership until his election to the Senate last year, said the rewritten House bill “may be more of a repeat” of the failed “cut, cap, balance” approach championed by conservatives “instead of a movement to being part of the solution.”
Boehner was “upbeat” during a luncheon with Senate Republicans, participants said, but senators exiting the meeting readily conceded that the House bill would not survive in the Senate. Blunt said talks were focused on finding a compromise that could pass the Democratic Senate and win support from a majority of Boehner’s Republicans.
“Not all of his members, but a majority,” Blunt said.
Boehner is likely to suffer defections if he brings up a Senate-passed compromise, and he would need House Democrats to fill in the gaps — a difficult position for him politically. But GOP senators said they believe Boehner stands ready to do what it takes to avoid a default.
“I think things are moving better than they appear to be moving,” said Sen. Johnny Isakson (R-Ga.). “There’s agreement on cuts. And there’s almost unanimous knowledge that default is not in the cards. That’s the heart of the issue. The rest of it’s details.”