WASHINGTON (AP) — Neither the Republican-controlled House nor the Democratic-led Senate has a clear path forward for must-pass legislation to allow the U.S. government to continue to borrow to pay its bills, putting lawmakers and financial markets alike on edge less than a week before the deadline for heading off the nation’s first-ever default.
House Speaker John Boehner was forced late Tuesday to postpone a floor vote on his plan that originally had been scheduled for Wednesday after nonpartisan congressional scorekeepers said the proposal would cut spending less than advertised. He promised to rewrite the measure, but the move means the House can’t vote on it until Thursday at the earliest.
Boehner needs to do more than pump up the legislation. He needs to shore up his standing with conservatives backed by the small government, anti-tax tea party movement demanding deeper spending cuts to accompany an almost $1 trillion increase in the government’s borrowing cap. Many conservatives already had promised to oppose it.
“We need more drastic cuts,” said Republican Rep. Jason Chaffetz of Utah. “I can’t support it in its current form.”
Unless he can wrestle the situation under control, Boehner risks losing leverage in his dealing with President Barack Obama and Democrats controlling the Senate.
Meanwhile, the clock was ticking down to next Tuesday’s deadline to continue the government’s borrowing powers and avert possible defaults on U.S. loans and obligations like $23 billion worth of Social Security payments to retirees due on Aug. 3. The Capitol’s telephones were jammed after Obama urged the public to contact their representatives in his Monday night address to the nations.
Credit rating agencies have threatened to downgrade the United States’ gold-plated AAA rating if Congress and the White House don’t extend the debt ceiling and take steps to bring long-term deficits under control.
While Boehner searched for votes in favor of his plan among House Republicans, some Americans seemed to edge closer to the notion that the Aug. 2 deadline might pass without a solution. The stock market fell again Tuesday, although not dramatically. California planned to borrow about $5 billion from private investors as a hedge against a possible federal government default.
The White House spoke with veterans groups about what might happen to vets’ benefits if a deal isn’t reached. Obama has said he can’t guarantee Social Security checks and payments to veterans and the disabled would go out on schedule.
Despite the House Speaker’s efforts, Boehner’s plan was not winning converts among some stalwart conservatives. It prompted Senate Democratic leader Harry Reid to declare that the bill was destined to fail in the Senate and it drew a White House veto threat. But it was framing the debate over how to reduce long-term deficits while raising the debt ceiling.
However, Boehner’s bill was driving a wedge through Republican ranks. Conservative bloggers, several tea party groups groups and the Club for Growth, which funds primary campaigns against Republicans it deems too squishy in their conservatism, denounced Boehner’s plan as too weak. The U.S. Chamber of Commerce, a pro-business lobbying group closer to the Republican mainstream, urged support of Boehner’s bill.
Tuesday’s Congressional Budget Office analysis said the Boehner’s measure would cut the deficit by about $850 billion over 10 years, not the $1.2 trillion he originally promised. Even more embarrassing was a CBO finding that the measure, which would provide a $900 billion increase in the nation’s borrowing cap, would generate just a $1 billion deficit cut over the coming year.
Boehner’s plan would couple budget savings gleaned from 10 years of curbs on agency budgets with a two-track plan for increasing the government’s borrowing cap by up to $2.7 trillion. The first increase of $900 billion would take effect immediately; the second increase could be awarded only after the recommendations of a special bipartisan congressional panel are enacted into law.
The White House says Boehner’s measure would reopen the delicate and crucial debt discussions to unending political pressure during next year’s presidential and congressional election campaigns and risk more uncertainty in the markets.
The White House promised to veto Boehner’s measure if it were to reach Obama’s desk.
It’s unlikely to come to that. Reid promised the measure would never make it through the Democratic-controlled Senate.
Reid held back on forcing a vote on his competing measure, which he unveiled Monday to poor reviews from Republicans like Senate Minority Leader Mitch McConnell of Kentucky. Reid appears to hope that his measure, which promises $2.7 trillion in spending cuts and would increase the debt limit enough to keep the government afloat past the 2012 elections, could emerge as the last viable option standing and could be modified with input from Republicans.
Those same Republicans blasted Reid’s bill for assuming $1 trillion in savings from winding down the wars in Iraq and Afghanistan they say are phony. But McConnell is emerging as a key figure in the endgame and he sounded a conciliatory note in an appearance on Tuesday.
“We need to get an outcome. And to get an outcome, a Republican House, a Democratic Senate and a Democratic president would have to reach an agreement,” McConnell said. “So I’m prepared to accept something less than perfect, because perfect is not achievable.”
Associated Press writer Andrew Taylor contributed to this report.