Default Fears Worsen As Senate Kills Boehner Debt Bill

After a 24-hour delay and concessions to conservatives, the House on Friday narrowly approved a Republican fiscal plan that the Senate quickly rejected in a standoff over the federal debt ceiling that was keeping the government on a path to potential default.

Barack Obama now has only few days to solve the debt crisis. Otherwise there is a strong possibility of default in the USA. Photo: Cvrcak1/Flickr

Late on Friday night the Republican-controlled House had passed a bill, which would have lifted the borrowing ceiling only temporarily, by just eight votes.

Democrats had opposed it as unacceptable and “extremist” – while conservatives influenced by the Tea party argued that it did not go far enough.

“To the American people, I would say we tried our level best,” Mr. Boehner said as he concluded a debate that had been abruptly halted Thursday evening when he fell short of the votes for victory. “We tried to do our best for our country, but some people still say no.”

John Boehner gave an impassioned appeal to his colleagues in the House to approve his plan, slamming his fist on the podium several times.

“I stuck my neck out a mile to get an agreement with the president of the United States,” he said, referring to failed negotiations with Mr Obama earlier this month

All Democrats, along with Republican Sens. Jim DeMint (R-S.C.), Rand Paul (R-Ky.) Mike Lee (R-Utah), David Vitter (R-La.), Lindsey Graham (R-S.C.) and Mark Kirk (R-Ill.), voted against it.

A total of 22 House Republicans bucked their party leaders on the final vote.

Some waited until the very last second to cast their votes, watching the vote board to see where the final tally was ending up before voting no. Reps. Trey Gowdy (R-S.C.), Joe Wilson (R-S.C.), Paul Broun (R-Ga.) and Tom Latham (R-Iowa) all logged their votes in the final moments.

Others who voted against Boehner’s bill included Reps. Justin Amash (Mich.), Michele Bachmann (Minn.), Jason Chaffetz (Utah), Jeff Duncan (S.C.), Tom Graves (Ga.), Tim Huelskamp (Kansas), Steve King (Iowa), Jim Jordan (Ohio), Connie Mack (Fla.), Mick Mulvaney (S.C.), Ron Paul (Texas), Steve Southerland (Fla.), and Joe Walsh (Ill.).

Some of these lawmakers resisted serious arm-twisting from GOP leaders the day before.

Five Democrats didn’t vote. Among them, three were from California: Reps. Maxine Waters, Jackie Speier and Joe Baca. The two others, Reps. Gabrielle Giffords (Ariz.) and Maurice Hinchey (N.Y.) have been absent for medical reasons.

Earlier in the day at the White House, Mr. Obama said “any solution to avoid default must be bipartisan. I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support from both parties in the House, a plan that I can sign by Tuesday.”

Mr. Obama urged Republicans in the House and Senate to abandon a bill that “does not solve the problem” and has no chance of passage in the Senate. “There are a lot of crises in the world that we can’t always predict or avoid,” he said. “This isn’t one of those crises.”

In retribution, the House announced it will vote on Saturday against a different debt ceiling bill authored by Senate Majority Leader Harry Reid (D-Nev.), in order to prove that his legislation is dead on arrival in the House.

The Reid bill would actually cut $2.2 trillion from the deficit over the next decade, while raising the debt ceiling beyond the 2012 election.

Rep. Jeff Flake (R-Ariz.), who is running for Senate in 2012, said Boehner’s original bill wasn’t sufficient because “it was only two parts of the Cut, Cap and Balance.”

“The ‘balance’ is now there,” he said.

Given the political reality that Boehner’s bill was dead on arrival in the Senate, Flake wouldn’t speculate on what needs to happen next to ensure a deal is passed by August 2.

But he noted that at this point, there’s “not that much difference” between Boehner’s and Reid’s bills. And if Reid were willing to attach a balanced budget amendment to his proposal, Flake said he would support that plan.

Reid’s bill currently “has cuts, meager. Caps, eh, somewhat,” he said. “But if you put some balance in there, I’m there.”

“Harry Reid has three different options,” House Majority Leader Eric Cantor (R-Va.) said on Thursday. “One is to suffer the economic consequences of default, which all of us hope he doesn’t choose. Two is to bring up the bill we sent prior [Cut, Cap and Balance] or to accept the compromise bill that we are sending over today,” Cantor added. [via The Telegraph, Huffpost and The New York Times]

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