Debt-Limit Deadlock After Senate Kills Boehner Bill

Lawmakers who said they were determined to avoid an unprecedented government default remained at an impasse over the raising the nation's debt limit Saturday as prospects of economic chaos loomed.

Senators were expected to continue talking even though their efforts publicly came to an abrupt halt Friday evening after the Democratic-controlled Senate voted 59-41 to table Republican House Speaker John Boehner's bill, effectively killing it less than two hours after the House passed it.

Democrats opposed the measure because it would require another debt-limit debate early next year.

After the tabling vote, Democratic Majority Leader Harry Reid and Republican Senate Leader Mitch McConnell of Kentucky could not agree on how to proceed on a bill by Reid. McConnell wanted a filibuster, requiring a 60-vote supermajority to move Reid's bill forward, and Reid wanted a procedure allowing his bill to move with a simple majority. Reid said McConnell refused negotiate with him.

Sen. Kent Conrad, D-N.D., told MSNBC's "The Last Word" that McConnell had said he will not negotiate with Reid, just with President Barack Obama.

The Senate adjourned until 1 p.m. EDT Saturday was scheduled to take up a vote on Reid's bill at 1 a.m. Sunday. The Republican-controlled House planned a 1 p.m. Saturday vote on Reid's proposal, McConnell said, noting the House vote on Reid's bill would precede the Senate's.

Boehner's plan, which passed the House 218-210 with no Democratic support, would have raised the debt ceiling $900 billion, cut spending $917 billion over a decade and call for a balanced-budget amendment before the limit could be raised again, presumably next year.

Senate Democrats had vowed to block it in favor of Reid's longer-term $2.4 trillion debt limit increase with about $2.2 trillion in spending cuts. Reid revised the bill Friday to essentially allow the president to raise the debt ceiling in steps, as McConnell had previously suggested. Through a complex legislative process, Congress could disapprove later debt-ceiling hikes with a two-thirds vote in each chamber, Reid said.

After the Senate vote, Boehner spokesman Michael Steel said, "For the second time, the House has passed a reasonable, common-sense plan to raise the debt limit and cut spending and, for the second time, Sen. Reid has tabled it. The responsibility to end this crisis is now entirely in the hands of Sen. Reid and President Obama."

Boehner said his bill was necessary "after I stuck my neck out a mile trying to get an agreement with the president of the United States. I stuck my neck out a mile. And I put revenues on the table in order to try to come to an agreement to avert us being where we are."

"But a lot of people in this town can never say yes. This house has acted and it is time for this administration to put something on the table, tell us where you are."

Boehner said his bill would cut spending by more than the increase in the debt limit, impose spending caps to restrain future spending, and require Congress to send states a balanced budget amendment before the ceiling could be raised again.

Boehner on Thursday failed to round up enough support for his plan, exposing a rift in the Republican Party. But he tweaked the bill and told the House Friday evening that it was necessary to pass his plan "for the sake of our economy" and to "end this crisis now."

Rep. Kathy Hochul, D-NY, told the House before the vote, "Never, never has there been an intentional disaster perpetrated by the very people who were sent here to be the caretakers of this country. ... Am I really supposed to tell the greatest generation that when they passed us the torch, we dropped it because we couldn’t compromise?"

After the vote, Rep. Jim McDermott, D-Wash., was one of many House members react on the floor.

"This House, led by the Republicans, has put every state, city, every university that writes bonds at risk… because of this foolishness," McDermott said. "We need a clean lifting of the debt limit."

The White House called again for compromise.

"The bill passed today in the House with exclusively Republican votes would have us face another debt ceiling crisis in just a few months by demanding the Constitution be amended or America defaults," said a statement from the White House. "This bill has been declared dead on arrival in the Senate."

"Now that yet another political exercise is behind us, with time dwindling, leaders need to start working together immediately to reach a compromise that avoids default and lays the basis for balanced deficit reduction," the White House said, backing Reid's plan and echoing comments President Barack Obama made earlier in the day.

"Any solution must be bipartisan," said Obama from the Diplomatic Room at the White House. "We're in rough agreement," said the president. "There are plenty of ways out of this mess."

"The time for putting party first is over," he added. "It’s time to step up and show the leadership the American people expect."

He later reiterated his call to action on Twitter: "The time for putting party first is over. If you want to see a bipartisan #compromise, let Congress know. Call. Email.Tweet. --BO"

Shortly after the president's speech, GOP lawmakers announced plans to tweak the House bill with hopes of gaining the votes needed for passage.

The balanced budget amendment was a key demand of rebellious conservatives who withheld their votes from the legislation on Thursday night.

Earlier, an aide who attended Boehner's meeting with the GOP conference told NBC News, "If we pass this today, we will have sent not one, but two bills to the Senate that would end this crisis. All that will stand between the American people and a resolution to this crisis will be the Senate, which has passed nothing."

Reid, from Nevada, said he had invited McConnell to join him in negotiations. "I know the Senate compromise bill Democrats have offered is not perfect in Republican eyes. Nor is it perfect for Democrats," Reid said. "But together, we must make it work for all of us. It is the only option."

But McConnell dismissed the Democratic effort, arguing that it stands no chance in the Republican-controlled House, and he accused Obama of pushing the nation to the brink of an economic abyss.

Concerns about a U.S. default on Aug. 2 continued to reverberate around markets Friday, with stocks down again. While investors have been jittery for weeks, the inability this week of Republicans to even manage to get their own party to agree on a plan has reinforced those fears with just days to go.

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