Congress now only has four days to meet a deadline set by Timothy Geithner, the Treasury Secretary, to raise the national borrowing limit or risk defaulting on loans or failing to make millions of routine payments to Americans.
“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.”
President Barack Obama says that unless Democrats and Republicans strike a deal, the government will start being unable to pay all its bills on August 2, a once unthinkable prospect that is increasingly unnerving investors.
Mr Boehner was hopeful of holding the vote on Friday, but there are now serious doubts about whether or not there is time to reach a deal before Aug 2.
Any bill passed in the House must also be approved by the Senate and President Barack Obama. Both Democratic leaders and the White House have said they cannot tolerate Mr Boehner’s bill.
With only four full days left, the Treasury could unveil as early as Friday an emergency plan explaining how the government would function and pay its obligations if Congress does not agree to raise its borrowing limit from $14.3 trillion.
Congressional aides were busy working on a “Plan C” into the early hours, which could include a short term extension of 30 or 60 days, or a bill that would allow the president to extend the debt ceiling unilaterally.
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.”
“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.
Some Republicans, such as presidential hopeful Michele Bachmann, have accused the administration of scare tactics over the consequences of not raising the debt ceiling. She said Mr Geithner had constantly changed the deadline.
She called on Mr Obama to “exercise the leadership he has failed to show so far”.
Top Senate Democrat Harry Reid wants to raise the debt ceiling by enough to kick the crisis beyond the November 2012 presidential election.
Reid indicated late on Thursday that he may advance his own bill, which cuts spending by $2.2 trillion over 10 years, in the Senate rather than use Boehner’s proposal as the basis for a compromise.
The delay would thrust the heated issue into the midst of the 2012 election campaign. Mr Obama, who faces re-election, has insisted that the ceiling be increased sufficiently to push the issue beyond the 2012 vote.
Fears that the deadlock won’t be broken forced global stock markets down yet again. US stocks have fallen all week, while European markets were down and Japan’s Nikkei average fell almost 1.5 per cent. [via The Telegraph, Reuters and CNN]