House, grumbling, passes debt deal; Senate is next

McClatchy NewspapersAugust 1, 2011 

WASHINGTON — After many weeks of high-stakes drama that put the nation's economy at risk while Americans and the rest of the world watched in dismay, a reluctant House of Representatives on Monday passed a deal by 269-161 that would raise the debt ceiling immediately and reduce federal budget deficits by trillions of dollars over the next decade.

The House vote was the one in doubt; Senate passage is all but assured, probably around noon Tuesday.

The agreement, crafted by President Barack Obama and congressional leaders after weeks of often intensely personal negotiations, aims to slash deficits by at least $2.1 trillion over the next 10 years.

It also provides for increasing, by at least that amount, the nation's $14.3 trillion debt limit. It must be increased by Tuesday or the government would be at risk of default, possibly panicking financial markets and sending the economy reeling back into recession.

The first $400 billion debt-ceiling increase would go into effect immediately. Another $500 billion increase would take effect this fall, unless Congress rejected it _ considered highly unlikely, because even if Congress voted it down, Obama could veto the disapproval and Democrats would have the numbers to sustain the veto.

The final debt-limit increase of at least $1.2 trillion would take effect next year, after further deficit reduction went into effect.

Obama announced the agreement Sunday night, and the mood in Congress on Monday was feisty and frustrated. Lawmakers on the left and right were angry.

On the left, Rep. Maxine Waters, D-Calif., called the agreement "a slow walk to total disaster." Rep. Steve Cohen, D-Tenn., branded it "evil and more evil."

Waters and other liberals warned that Obama could pay a political price.

"The progressive element of this country will be so disappointed with this administration if this bill passes. It translates into people staying home. I absolutely believe that," she said, referring to voters in November 2012.

The administration, according to Waters, a veteran Congressional Black Caucus member, "was not tough enough, that's what I'm getting in phone calls. You have to understand that there's no consistency around here, in the administration, in this House."

On the right, some thought the agreement didn't go far enough.

"This plan does not solve our problem," said Sen. Rand Paul, R-Ky. "Not even close. I cannot abide the destruction of our economy, therefore I vigorously oppose this deal and I urge my colleagues and the American people to do the same. "

But most lawmakers were reluctant supporters, though House Democrats split their votes evenly.

"Everyone had to give something up. People on the right are upset. People on the left are upset. It was a compromise," said Senate Majority Leader Harry Reid, D-Nev.

Broken down by party, 174 House Republicans and 95 Democrats voted for the measure, and 66 Republicans and 95 Democrats voted against it.

The agreement would cut deficits by $917 billion over 10 years, according to an analysis by the nonpartisan Congressional Budget Office. Those reductions would allow the debt limit to be raised by $900 billion, which is expected to be enough to last through early next year.

About $350 billion would come from defense spending. The rest would come from cuts to a variety of domestic programs, such as education, housing and transportation. Medicare, Medicaid and Social Security wouldn't be cut.

A second series of reductions, totaling as much as $1.5 trillion, would be subject to a vote by late December. A special bipartisan joint congressional committee will recommend specifics.

The committee would have to make recommendations by Nov. 23, and Congress would have to vote by Dec. 23.

If those recommendations aren't approved on up-or-down, non-amendable votes in Congress, programs would be cut automatically across the board — half from defense, half from non-defense — starting in 2013. Social Security, Medicaid, military and civilian retirement, and most low-income programs would be exempt. Medicare cuts would be restricted to payments to providers, and limited.

Once the reductions are made, the debt limit would go up by at least another $1.2 trillion, which is expected to allow the government sufficient borrowing authority through 2012.

Supporters of the deal focused most of their attention on the House, where winning passage was more of a struggle.

Unlike senators, who serve six-year terms and represent more diverse constituencies, every lawmaker in the House faces re-election next year, and many represent districts that were carefully drawn to make them politically homogenous.

Most of the 87 House Republican freshmen were elected with the backing of the grass-roots tea party movement, which has been adamant that deep spending cuts are needed and allowing debt to rise is forbidden. Many frown on compromise.

There was some grumbling about the defense reductions, and some didn't think that the compromise cut overall spending enough.

They noted that the nonpartisan Congressional Budget Office estimated that the deficit would be reduced by only $21 billion in fiscal 2012 and $42 billion the following year, a schedule designed to permit the private economy to strengthen before federal spending is ratcheted back sharply. Many conservatives viewed that as weak.

"I want a constitutional amendment" to balance the budget, said Rep. Steve King, R-Iowa.

Still, there was also a general sense among many conservatives that the bill was an important step in the effort to curb the size of government.

"It represents something really close to the best we could have gotten under the circumstances," said Rep. Tim Griffin, R-Ark.

"I'm not up here to get what I like," said Rep. Allen West, R-Fla. "I'm up here to do what's best for the American people."

Dismay was rampant on the other side of the political spectrum. Liberals were upset that no tax revenues were included in the agreement, and that the spending cuts would decimate popular social programs.

Rep. Yvette Clarke, D-N.Y., said she'd vote no because she couldn't sell the deal in her district.

" 'You know what, the wealthiest people in this nation don't have to sacrifice anything, but we're going to take another pound of flesh from you.' There's no way I can do that," she said.

"I think we ceded the whole moral ground on billionaires paying their fair share," added Rep. Eliot Engel, D-N.Y. "You know what we got? We avoided default, and I'm glad we avoided default. If you had told me this would be the package a month ago, I would have asked you what you were smoking."

(Daniel Lippman, Adam Sege, Halimah Abdullah and Curtis Tate contributed to this article.)

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