House finally passes GOP debt plan, but Senate votes it down

McClatchy NewspapersJuly 29, 2011 

WASHINGTON — After days of theatrics, the House of Representatives Friday evening finally approved a conservative Republican plan linking an increase in the nation's debt ceiling to the highly unlikely passage of a balanced budget amendment to the Constitution.

The measure passed on a 218-210 vote.

The GOP plan then met a swift end the Democratic-run Senate, which was moving to take up its own, Democratic-authored plan this weekend.

Passage of the House plan set the stage for three final days of intense, last-ditch negotiations, as President Barack Obama again implored Congress to find a path "out of this mess."

If the debt limit is not raised by Tuesday, the government could default on its debt, which could trigger panic in financial markets and send the nation back into recession.

While the two parties were close to agreeing on most final terms of a deficit-reduction plan, they remained split over how to increase the debt limit. Democrats want one vote on a ceiling that would increase the Treasury's borrowing authority sufficient to last through 2012.

The White House is open to a two-day extension of the debt ceiling if needed to allow time for a real deal to work its way through Congress.

That could happen by passing a bill giving the Treasury Department approval to borrow enough to keep financing government to Aug. 4, or by granting a dollar increase in the debt ceiling, according to Democrats familiar with debt talks. Obama and Vice President Joe Biden continue to talk to members of Congress from both parties.

The House Republican plan would provide for two votes raising the ceiling _ one immediately that would increase Treasury borrowing authority by about $900 billion, enough to stretch into early 2012, and a second one after Congress approves the balanced budget amendment.

House Speaker John Boehner of Ohio defended this approach in a fiery speech to close the debate. "I stuck my neck out a mile," he said, trying to get a bipartisan agreement.

Approval of the balanced budget amendment is highly unlikely, since it requires two-thirds approval by both houses of Congress. Democrats, who oppose the amendment as unwise because it would prevent the government from responding to economic crises, control 193 of the House's 435 seats and 53 of 100 Senate seats.

Friday was a day of fast-moving developments. Obama said Friday morning in televised remarks from the White House that constituents should keep the pressure on Congress.

"Keep it up," Obama said in televised remarks from the White House. " Let your members of Congress know. … Keep the pressure on Washington and we can get past this."

Later in the day, his 2012 campaign took to Twitter to urge followers to tweet members of Congress.

"Live in MN? Have a Republican representative? Tweet them and ask them to support a bipartisan compromise to deficit reduction," @BarackObama tweeted.

In the Senate, Democrats said they would begin considering their own $2.2 trillion deficit reduction plan, one unlikely to win much if any Republican support. Senate Majority Leader Harry Reid of Nevada threatened to hold a vote to end extended debate on the plan shortly after midnight Sunday; Senate rules prohibit him forcing one sooner.

It's questionable whether his plan will survive in the Senate, since it takes 60 votes to cut off extended debate and move to a vote on passage — meaning Democrats must attract seven Republicans for Reid's plan to pass.

Still, Reid said he'd move ahead.

“The deadline will not move,” he said of Tuesday's deadline for raising the nation’s $14.3 trillion debt ceiling.

“We have hours, I repeat, hours, to act,” said Reid, speaking on the Senate floor as he opened the Senate for business Friday. “That’s why, by the end of the day, I must take action on the Senate’s compromise legislation.”

Some hope existed that common ground could be found.

Lawmakers noted that the Reid and Boehner plans had many similarities. Both would cut discretionary spending by about $750 billion over 10 years. Neither plan would raise new revenue. And both would set up 12-member legislative committees to find new ways to reduce future deficits.

Reid's plan assumes about $1 trillion in savings from the winding down of the Iraq and Afghanistan wars, while Boehner's does not include those funds. Though Republicans included the savings as part of their budget plan in April, many now argue that such savings do not count as real future budget cuts, since the wars are winding down already.

"This is not a situation where the two parties are miles apart," Obama said. "There are plenty of ways out of this mess. But we are almost out of time."

Reid said Friday that he’s hoping to meet with Minority Leader Mitch McConnell of Kentucky and was asking Senate Republicans for ideas “to improve my legislation.”

He ruled out any short-term fix, saying, “We’re not going to do it that way.

“We can not be in this battle all the time,” he said. “Right now extremists have locked down this Congress. ... The country is in an economic malaise and they want to keep this up?”

The GOP House victory came after three days of tense negotiations with rebellious GOP conservatives, who had been reluctant to back their own Republican leaders' initial proposal.

Once the bill was revised to include the balanced budget amendment requirement, conservatives rejoiced.

Rep. Phil Gingrey, R-Ga., said he decided to support the bill after the balanced budget agreement was included.

He noted that constituents may say, “You pledged not to raise the debt ceiling not one penny until you had passed a balanced budget amendment.'

“This doesn’t get me there, but I’m comfortable with it,” he said, noting that anti-tax groups such as the conservative Club for Growth had also changed course on the measure.

Gingrey said it was important for fiscal conservatives to extract as much as they could from the negotiations.

“I felt all along that we had a great opportunity that won’t come along maybe in my lifetime and I thought we needed to go to the wall on this,” he said.

"The American people have strongly renewed their November calls of bringing fiscal sanity to Washington. I am blessed to be a vehicle driving their wishes to fruition," said Rep. Jeff Landry, R-La.

Democrats dismissed the Republican effort as misguided.

"That is so absolutely detached from any reality," Senate Budget Committee Chairman Kent Conrad, D-N.D., said of the House plan.

(Steven Thomma, David Goldstein, James Rosen and Halimah Abdullah contributed to this story.)

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