Nearly two hours after the House narrowly approved House Speaker John Boehner's debt-ceiling bill, the Senate voted 59-41 to reject the speaker's plan, leaving Congress no closer to reaching agreement before the August 2 default deadline.
The vote did not kill the Boehner bill itself, allowing it to be used as a vehicle for a later compromise.
But Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., appeared at an impasse late Friday on negotiations on a Senate bill to raise the debt ceiling. As a result, Reid introduced new language to tighten his original proposal in the hopes of gaining more Republican support on a cloture vote on his legislation expected early Sunday.
According to a memo from his office, Reid's latest proposal would increase the deficit reduction over 10 years from $2.2 to $2.4 trillion, with a "dollar to dollar" increase in debt ceiling based on a proposal originally authored by McConnell to fast-track resolutions of disapproval to allow the president to raise the debt ceiling with the political liability falling on Democrats.
Reid's proposal establishes spending caps for the next 10 years that if exceeded would trigger across-the-board spending cuts. Much of Reid's savings, $1.2 trillion, are achieved by winding down the wars in Iraq and Afghanistan which Republicans decry as budget gimmicks.
Reid's bill would also set budget levels and allocations for fiscal 2012 and 2013, since the Senate has failed to pass a budget, which would allow the Senate to move forward more easily with their appropriations.
Democrats insisted rank-and-file Republicans were willing to negotiate. "There's been some movement on the floor today," he said. Indeed, some Republicans, such as Sen. Bob Corker, R-Tenn., endorsed a debt ceiling extension through the next election, which Democrats are seeking in Reid's plan.
Reid and Majority Whip Richard Durbin, D-Ill., said McConnell informed them he was not willing to cut a deal. Durbin said McConnell called Reid Friday and said, "I'm not going to negotiate with you."
If McConnell and Reid do in fact fail to compromise, and Reid can't appeal to seven Republicans to side with Democrats on cloture, the Senate will push the nation closer to default with a looming August 2 deadline. President Obama said Friday that he was relying on McConnell and Reid to come through and cut a deal.
Reid's bill will not survive Sunday's cloture vote without GOP support. He is seeking a deal with Senate Republicans to amend the bill with the compromise measure. Senate aides said talks on a compromise bill were focused on a trigger that would require spending cuts if a bipartisan congressional committee created in both Boehner and Reid's bills fails to agree on further cuts.
In the House, it took the full weight of leadership and an 11th hour capitulation to a band of fiscal conservatives to secure enough support for House Republicans to send the debt-ceiling bill off to fail in the Senate.
As such, just four days before the United States is scheduled to begin defaulting on its debts, Washington remained mired in deadlock with lawmakers holding firm to intractable positions on their deficit-reduction conditions required to raise the $14.3 trillion debt ceiling.
The House narrowly passed, 218-210, the bill that the Senate cannot support and the White House has vowed to veto. The Senate is scheduled to take up a proposal this weekend that cannot pass the House, despite White House support. And neither leaders nor aides in either party or either chamber are fully confident the debt-ceiling debate can be resolved by August 2.
Boehner again took on Democrats and the White House in remarks on the House floor on Friday. "I stuck my neck out a mile to try and get an agreement with the president of the United States," he said, conceding that he had put revenues on the table to find a compromise but, he argued, Democrats failed to offer sufficient compromises to reduce the deficit. "Tell us where you are!" Boehner said, to raucous cheers from his rank-and-file.