[ 2011-07-29 ]

No vote yet on US debt crisis
Washington (CNN) -- House Republicans called off a
vote Thursday on Speaker John Boehner's plan that
would raise the nation's debt ceiling and enact
sweeping cuts in government spending, but the
possibility remained that the measure could come
up on Friday.

"Members are advised that there will be NO VOTES
in the House tonight," said a message from House
Majority Whip Kevin McCarthy's office. "We
apologize for the late notice."

The delay in voting on the proposal revealed a
deep rift within the GOP that could undermine the
party's latest attempt to avoid an unprecedented
national default and stave off potential economic
catastrophe.

Boehner, R-Ohio, was unable to muster sufficient
support from his own caucus to guarantee his
proposal would pass in the face of expected
unified Democratic opposition. Even if the Boehner
plan does pass the House, Senate Majority Leader
Harry Reid, D-Nevada, has promised the
Democratic-controlled Senate will block it.

McCarthy's announcement came more than four hours
after the House had been expected to vote on the
Boehner plan. The House Republican caucus then
announced a previously unscheduled meeting for 10
a.m. Friday morning.

In an indication of the seriousness of the debt
ceiling issue in Congress, Reid also announced
that Senate Democrats will hold their own meeting
at the same time.

Democratic leader Rep. Nancy Pelosi accused the
Republicans of taking the country to "the brink of
economic chaos," saying they needed to come back
to "the table to negotiate a bipartisan, balanced
agreement."

The tone was similar from Democratic National
Committee Chair Debbie Wasserman Schultz, who said
Thursday's developments should be a "wakeup "call
to the "intransigent Republican majority" in the
House.

"Now that his attempt at partisan politicking has
failed, I hope that Speaker Boehner will finally
join with President Obama and Democratic
Congressional leaders in a serious way to enact
bipartisan legislation to prevent an historic and
catastrophic default on the United States' debt,"
she said.

Earlier, Rep. Nan Hayworth, R-New York, who
supports the Boehner plan, told CNN that some
members "have had a lot of deep thinking to do"
about their votes, and said the delay might be to
confirm "the last few" supporting votes.

The vote in the House had been scheduled for
roughly 6 p.m. ET. Few if any Democrats were
expected to back the measure. Assuming House
Democrats remain united against the bill, Boehner
will need the support of at least 216 of the
House's 240 Republicans.

After announcement of the delay in the vote,
conservative congressmen were seen entering and
leaving Boehner's office as the speaker tried to
generate the necessary support. A floor debate on
the plan was cut short, and the House moved on to
discuss the naming of a post office in Illinois.

Staff members were later seen carrying pizzas from
a local restaurant into Boehner's office.

Defeat of the measure would be a major setback for
Boehner, who assumed his post in January, and
further muddy the already tense negotiations over
a deficit reduction deal that would also increase
the federal borrowing limit. In particular, it
would show Boehner was unable to control the tea
party conservatives elected last year in a
Republican wave that delivered a GOP majority in
the House and his ascension to speaker.

Earlier, Boehner declared to reporters that the
measure would pass, but McCarthy, R-California,
only would say progress was being made in rounding
up the votes.

Another speaker at the news conference, Republican
Rep. Renee Ellmers of North Carolina, let slip
there's more work to be done, calling on House
colleagues "who may not be there yet" but were
"moving forward on those votes."

Whether Boehner can push the measure through
remains an open question. Tea party-backed
conservatives staged a virtual revolt against the
bill over the past two days, complaining that it
doesn't do enough to shrink the size of government
and stem the tide of Washington's red ink.

"We don't have the votes yet, (but) we're going to
get it passed," Boehner declared Thursday morning
to his caucus, according to one Republican source
who spoke on condition of not being identified.

Some Republicans have said this will be their
last, best proposal. Senate Democrats, however,
have warned the plan is dead on arrival on their
side of Capitol Hill even if it passes the House.

Reid declared that the Senate was prepared to
immediately vote on -- and defeat -- the speaker's
plan, assuming the House approves it.

"There are things that either side cannot get,"
Reid said Thursday morning, adding that
Republicans need to "accept that and move on."
Sen. Chuck Schumer, D-New York, called Boehner's
proposal "a futile gesture."

GOP leaders responded by accusing the Democrats of
playing political games.

"When is somebody on the other side of the aisle
going to say yes?" Boehner asked. "We have a
reasonable, responsible (plan). Let's pass this
bill and end this crisis."

Senate Minority Leader Mitch McConnell,
R-Kentucky, warned that "Democrats are playing
with fire here."

"It's hard to conclude that they're doing it for
any other reason than politics," he said.

White House Chief of Staff Bill Daley told CNN on
Thursday that, presuming the Boehner plan wins
House approval and gets blocked in the Senate, the
next step is for everyone "to take a step back in
the Congress and look at where is a point of
compromise."

Daley said that similarities between the Boehner
plan and a competing proposal offered by Reid "may
be the grounds for a deal that, hopefully, both
parties can pass."

Both the House and Senate planned to work through
the weekend, and officials say ongoing
behind-the-scene talks will continue.

As the political maneuvering continues, the clock
continues to tick down. If Congress fails to raise
the current $14.3 trillion debt ceiling by August
2, Americans could face rising interest rates and
a declining dollar, among other problems.

Some financial experts have warned of a downgrade
of America's triple-A credit rating and a
potential stock market plunge. The Dow Jones
Industrial Average fell nearly 200 points
Wednesday, but opened positively Thursday on the
basis of encouraging news from job and housing
markets.

Without an increase in the debt limit, the federal
government will not be able to pay all its bills
next month. President Barack Obama recently
indicated he can't guarantee Social Security
checks will be mailed out on time.

Regardless, some conservatives insist they won't
back the Boehner plan or anything short of deep
spending cuts, caps on future spending and a
balanced budget to the U.S. Constitution. Rep.
Phil Gingrey, R-Georgia, told CNN on Thursday
morning that he's not on board.

"I love my speaker, (but) we just keep spending,"
Gingrey complained. A balanced budget amendment is
"the only way we can constrain ourselves," he
said.

However, one of the GOP's party elders, Arizona
Sen. John McCain, argued Wednesday that it's
"worse than foolish" to suggest the current
Congress will pass such an amendment by August 2.
It's "bizarro," McCain said.

Leaders of both parties now agree that any deal to
raise the debt ceiling should include long-term
spending reductions to help control spiraling
deficits. But they differ sharply on both the
nature and timetable of the cuts. Republicans are
seeking another vote on the debt ceiling before
the 2012 election; Democrats call the demand a
political nonstarter and economically
destabilizing.

The Boehner and Reid plans both suffered setbacks
earlier this week when the nonpartisan
Congressional Budget Office released reports
concluding that they fell short of their stated
deficit reduction goals.

Specifically, the CBO concluded that Boehner's
plan would cut spending by $850 billion rather
than the $1.2 trillion proponents claimed it would
save, which was below the $900 billion increase in
the debt ceiling included in the measure.

Boehner has since revised his plan, and the CBO
now estimates it would generate a total of $917
billion in savings over the next decade, an
increase of about $65 billion over the initial
version.

With the revisions, Boehner's proposal now meets
his pledge to match any debt ceiling hike with
dollar-for-dollar spending cuts.

Boehner's plan would require two separate votes by
Congress, allowing for a combined debt ceiling
increase of up to $2.5 trillion. In addition to
imposing nearly $1 trillion in spending
reductions, it would create a special
congressional committee to recommend additional
savings of $1.6 trillion or more.

Any failure on the part of Congress to enact
mandated spending reductions or abide by new
spending caps would trigger automatic
across-the-board budget cuts.

The plan also calls for a congressional vote on a
balanced budget amendment to the Constitution by
the end of the year.

Boehner has promised anxious conservatives votes
on two versions of a balanced budget amendment on
Friday, according to GOP leadership sources.

One version, if adopted by the states, would
require Washington to maintain a balanced budget.
The other version, one that conservatives have
long been pushing, would also require a
super-majority vote in both chambers to approve
any tax increases.

As for Reid's plan, a CBO analysis released
Wednesday concluded it would reduce deficits over
the next decade by $2.2 trillion -- $500 billion
short of promised savings of $2.7 trillion.
Democrats had been claiming their plan would meet
the GOP's demand that total savings should at
least match any debt ceiling hike through 2012.

Michael Steel, a spokesman for Boehner, said
Wednesday that the CBO analysis of Reid's proposal
"shows the Senate plan for what it is: a grab-bag
of gimmicks that gives the president a blank
check."

Democrats responded by arguing that Reid's plan
has more guaranteed savings than Boehner's. They
also promised that the final version of Reid's
bill will include more savings.

Reid's plan would cut spending by $1.8 trillion as
part of the total $2.2 trillion in savings,
according to the CBO. Roughly $1 trillion in the
savings are based on the planned U.S. withdrawals
from military engagements in Afghanistan and
Iraq.

Limiting future discretionary spending would save
another $751 billion, and an estimated $375
billion would be saved in interest payments due to
reduced borrowing because of the spending cuts.

Reid's plan also would establish a congressional
committee made up of 12 House and Senate members
to consider additional options for debt reduction.
The committee's proposals would be guaranteed by a
Senate vote with no amendments by the end of the
year.

Among other things, Reid has stressed that his
plan meets the key GOP demand for no additional
taxes. Boehner, however, argued this week that
Reid's plan fails to tackle popular entitlement
programs such as Medicare, which are among the
biggest drivers of the debt.

Beneath the harsh partisan rhetoric, there have
been signs of a growing recognition of a need for
further compromise. McConnell called Tuesday for
renewed negotiations with Obama, and indicated
that his party must be willing to move away from
some of its demands.

Sources close to the negotiations have told CNN
that Vice President Joe Biden is very much in the
mix of the back-channel conversations that are
occurring on a possible fallback position.

Obama made a nationally televised plea for
compromise Monday night.

A CNN/ORC International Poll reveals a growing
public exasperation and demand for compromise.
Sixty-four percent of respondents to a July 18-20
survey preferred a deal with a mix of spending
cuts and tax increases. Only 34% preferred a debt
reduction plan based solely on spending
reductions.

According to the poll, the public is sharply
divided along partisan lines; Democrats and
independents are open to a number of different
approaches because they think a failure to raise
the debt ceiling would cause a major crisis for
the country. Republicans, however, draw the line
at tax increases, and a narrow majority of them
oppose raising the debt ceiling under any
circumstances.

Source - CNN

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