Friday, July 29, 2011

Senate slaps down House bill -- clock ticks on compromise. Yikes!

Verne Strickland Blogmaster / July 29, 2011

ABC News -- House Republicans Friday evening narrowly passed a proposal to raise the debt ceiling by $900 billion, cut spending by about that much and require another debt ceiling vote in about six months -- only to have Democrats in the Senate scuttle it.

As expected, the Senate voted down -- tabled -- the House Republican bill written by House Speaker John Boehner, R-Ohio. The vote was 59-41.

Passage of Boehner’s bill could, however, strengthen the Republicans’ position, showing their unity as they enter negotiations with the Senate on what kind of compromise can ultimately pass both chambers of Congress and raise the debt ceiling before Aug. 2, when Treasury Secretary Tim Geithner has said the government will start to default on its debt.

That drama will play out over the weekend and into next week as senators begin consideration of their own bill backed by Senate Majority Leader Harry Reid, D-Nev., which would raise the debt ceiling through the coming general election and into 2013. The specifics of what language senators will consider are not yet set.

Democrats have noted their lack of input on the Boehner plan and say Republicans have refused to negotiate with them in recent days on a deficit reduction deal.

Republicans have pointed out that the Boehner plan and the earlier Cut, Cap and Balance Act are the only deficit reduction plans to pass a congressional vote in recent days.

A spokesman for Speaker Boehner reacted to the Senate's vote in a written statement.

“For the second time, the House has passed a reasonable, common-sense plan to raise the debt limit and cut spending," Boehner press secretary Michael Steel said, "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.”

So it appeared the game of "Debt Default Chicken" continued.  The House, following the Senate, is preparing a statement vote of its own. Each side's vote is intended to prove to the other that their debt-ceiling bills can’t pass.

Here’s the plan:

With the 59-41 vote against the Boehner bill behind the Senate, Reid is expected to move to begin debate in the Senate on his own bill to raise the nation's debt ceiling and reduce the deficit. But . . .

At 1 p.m. Saturday, the House of Representatives will have a vote on that Reid debt ceiling bill.  The Republican-controlled House almost certainly will vote it down. Of course, none of this means much.  The real question is when the two sides will negotiate a compromise that can actually pass.

Those negotiations have quietly begun, but it's hard for many observers to see how they can have a deal passed and signed by Aug. 2 if they have not agreed to a compromise deal by midnight Saturday.

If they do have a deal by then, they could have a final Senate vote by Monday morning, setting up House vote late Monday, averting the economic catastrophe they have all been predicting would result from inaction.

But the temperature on Capitol Hill doesn't appear conducive to compromise.

As the Senate voted to table the Boehner bill, a testy exchange played out on the Senate floor as the senators battled over procedure, highlighting the divide that still remains between Reid and Minority Leader Mitch McConnell, R-Ky.

Knowing that Reid at this time does not have the votes to pass his own proposal, McConnell took to the floor and offered to vote on cloture immediately on the Reid measure.

McConnell noted the irony of the House likely voting on the Reid plan before the Senate.

“We would be happy to have that vote tonight, and I would also mention to my friend, the House of Representatives intends to vote on the Reid amendment tomorrow afternoon at 1 p.m.,” McConnell said.

“We would be more than happy to accommodate the majority and have a vote on the Reid budget tonight. The markets are waiting for us to act."

It appeared to be a move to embarrass Reid, who apparently couldn’t hold a vote on cloture -- and win at the 60 vote threshold -- on his bill tonight.

Reid shot back, referencing days of delays in the House vote on Boehner's plan: “Let’s hope they’re more timely in their 1 o'clock vote tomorrow than they have been in the last few days.”

Reid said they would be happy to have a “simple majority vote,” on the proposal. A simple majority vote only needs 50 votes to pass. But McConnell obviously objected to a simple majority. He wanted it voted approved by 60 votes.

“This is almost an out-of-body experience to have someone suggest that we have a 50-vote threshold on a matter of this magnitude here in the United State Senate,” McConnell said. “I’m genuinely perplexed,
genuinely perplexed that my friend the majority leader doesn’t want to vote on his proposal.”

A frustrated Reid exclaimed, “We’ve been negotiating with ourselves,” and then left the podium.
Earlier this evening, after a night and day of uncertainty, cajoling and tweaking, the Boehner bill passed the House by a 218-210 vote.

Like their Senate colleagues, however, Democrats in the House held the line. Not a single one supported Boehner’s proposal. Twenty-two Republicans also opposed their party leadership’s self-described imperfect legislation.

Boehner delivered a fiery speech before the vote began, accusing the White House and President Obama of not offering their own proposal in months of negotiations.

“I stuck my neck out a mile to try to get an agreement with the president of the United States,” Boehner said, pointing out that until last week he was ready to accept some increased tax revenues to achieve a larger deficit reduction bargain.

“Put something on the table,” he yelled. “Tell this country where you are.”

Until last week, Boehner and President Obama were engaged in closed-door negotiations on a “grand bargain” to raise the debt ceiling while also trying to fix the problem of the debt by enacting sweeping reforms to Medicare and Social Security and overhauling the tax code. But Boehner abandoned those negotiations a week ago when he said Democrats demanded too many tax revenues to offset spending cuts.

The plan that passed Friday, also known as the Budget Control Act of 2011, was revised to ensure that a balanced budget amendment is passed by both Houses of Congress before a second tranche of debt limit increase authority is granted to the president in about six months.

The measure would find $917 billion in savings over 10 years, while the debt limit would be increased by $900 billion. The second stage of the plan would create a select joint committee on deficit reduction before the debt limit is increased again.

As Boehner left a meeting with Republicans Friday morning, he announced, "we have a deal," and noted that he was smiling.

He was not smiling Thursday night, when Republicans failed to even vote on an earlier version of the bill that lacked that balanced budget amendment provision. Boehner could only afford to lose support from 24 of his Republican colleagues, but when it became clear he didn’t have the votes Thursday evening after 5 p.m., the planned vote on the bill was delayed.

Including the balanced budget requirement effectively bought more votes Friday, particularly among freshman Tea Party members who came to Congress in 2010 promising to change Washington and rein in spending. To them, a constitutional amendment to balance the budget is key.

Rep. Jeff Landry, R-La., was previously a ‘no’ and announced on Friday he was a solid ‘yea.’

“Votes on the debt ceiling should be a thing of the past. This mess is not about the debt ceiling; it’s about Washington’s addiction to spending,” Landry said in a statement shortly after the meeting. “My fellow freshmen and I are committed to finding a long-term solution to our nation’s debt. A balanced budget amendment will prevent an immediate downgrade of our credit rating and ensure that we’re not right back at this point next year.”

That sentiment was echoed by other rank-and-file Republicans who have decided to drop their opposition to the plan now that there is a mechanism for long-term reform in the legislation.

Senate Democrats now will start the arduous process of bringing up their own bill for consideration. At the end of a days-long process, Reid’s will have to find support from a handful of Republicans to pass his proposal through the Senate.

Republicans have said that many of the cost savings in Reid’s proposal are “phony” -- he counts, for instance, $1 trillion in savings from winding down the wars in Iraq and Afghanistan even though those wars are already winding down. He would raise the debt ceiling for much longer, too. Both proposals create a new Congressional committee on deficit reduction.

It is now up to Congressional leaders to find that deal that can pass both houses of Congress.

ABC News’ Jonathan Karl (@jonkarl), John R. Parkinson (@jrpabcdc), Sunlen Miller, Michael S. James and Z. Byron Wolf (@zbyronwolf) contributed to this report.