Senate to House: No on Boehner's Debt Bill

After the speaker narrowly passed an altered version of his plan, Democrats in the upper chamber quickly voted it down

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.

But House Republicans have barely been able to find compromise within their own ranks, let alone with Senate Democrats or the White House.

Boehner suffered a blow on Thursday when a vote on his debt-ceiling plan was pulled when it became apparent late in the evening that Republicans did not have the votes necessary to pass his bill in the face of unanimous Democratic opposition. At least 18 lawmakers held out because they wanted tougher language included in the bill on a balanced budget amendment to the Constitution that leadership has acknowledged stands no chance of clearing the Senate. But in the end, leadership was forced to bend to their demands and approve a bill that is even more deeply opposed by Democrats. In a notable display of silence, no House Republican leader made any public statement or appearance following the postponement announcement on Thursday. Boehner held no press availabilities on Friday.

The speaker's proposal passed on a party line vote with 22 Republicans an all Democrats opposing the proposal. The vote was not without some drama. Majority Whip Kevin McCarthy, R-Calif, maneuvered the House floor speaking one-on-one with lawmakers as the vote neared 210, including Reps. Steve LaTourette, R-Ohio,Billy Long, R-Mo., and Dan Lungren, R-Calif., who all voted "yes" shortly after speaking with McCarthy. The bill reached 218, the amount required for passage, with just under four minutes left in the vote. The chamber quieted as lawmakers watched the board to see where the final GOP holdouts would go. South Carolina Republicans, who proved particularly stubborn to entreaties from leadership, waited until the final seconds of the vote to cast their "no" votes. They included Reps. Tim Scott>, Joe Wilson>, Jeff Duncan, Trey Gowdy, and Mick Mulvaney.

Boehner's legislation would reduce the deficit by $915 billion over 10 years and increase the federal debt ceiling by $900 billion, which would carry the United States through early next year. The bill would allow for an additional $1.5 trillion increase in the debt ceiling contingent on two outcomes: Congress enacting further deficit reductions in the orbit of $1.8 trillion by December and a Balanced Budget Amendment being sent to the states. The latter condition is what was added on Friday. The demand, however, is unrealistic as the two-thirds support required to send a constitutional amendment to the states does not exist in either chamber, so the House bill conditions the second debt increase on a proposition that will not occur.

Boehner's bill then headed to the Senate, where Reid's caucus proved it cannot pass in its current form. The Senate voted to table a motion to approve the Boehner bill, which keeps the bill alive as a vehicle if a compromise between the Senate and House bills emerges. All Senate Democratic Caucus members opposed the Boehner bill. Reid has offered a counter proposal to reduce the deficit by $2.2 trillion over 10 years and provide for just one increase in the debt ceiling through the 2012 elections, which the White House favors but House Republicans oppose.

"It's quite entirely possible that we could not reach an agreement or get it implemented by August two," said Rep. John Conyers, D-Mich., voicing the growing concern that after months of negotiations to head off a worst-case scenario, that is where Washington will end up.