Symbolic House vote on debt ceiling approaches
The House prepared to vote on a Republican proposal to raise the debt ceiling in exchange for steep spending cuts, in defiance of President Obama’s vow to veto the bill if it passed both chambers of Congress.
The standoff underscored the largely symbolic nature of the Republican measure amid ongoing behind-the scenes negotiations to avert a federal default.
The talks revolved around a Senate-led plan to let Obama act alone to increase the debt ceiling through 2012. The plan also would include as much as $1.5 trillion in budget cuts identified by Republican and Democratic negotiators after weeks of closed-door debate.
Senate leaders said Monday the chamber would stay in session through the weekend as negotiators scrambled for a deal to increase the government’s borrowing authority. Without an increase by Aug. 2, Treasury Department officials have warned of a possible default, with financial upheaval rippling worldwide.
U.S. and overseas stocks stumbled Monday in the face of the deficit uncertainty as well as unsettled European debt woes, analysts said.
The House vote, scheduled for Tuesday, centers on a GOP plan known as “cut, cap and balance” legislation. The proposal would cut spending by $111 billion in 2012 and cap future outlays to 19.9% of the nation’s gross domestic output. It also would require that Congress send a balanced-budget constitutional amendment to the states for ratification, a lengthy process.
The proposal is expected to pass the House but stall in the Senate. Even House endorsement of the package would not ensure that the proposed amendment, which would be formally introduced later, could win the two-thirds approval required for passage in each chamber.
Still, the vote Tuesday carries political significance by giving voice to the conservative majority that has refused to compromise with the White House on raising the debt ceiling.
The White House attacked the Republican cut, cap and balance plan, portraying it as a radical response to the deficit problem that would dismantle Medicare and other aspects of the federal safety net.
“It’s dodge, duck and dismantle,” White House Communications Director Dan Pfeiffer said at a news briefing.
As the floor action plays out this week, private negotiations are expected to continue. House Speaker John A. Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) held an unannounced meeting with Obama on Sunday at the White House.
The $1.5 trillion in cuts in the still-forming Senate plan would probably include cuts to agricultural subsidies and federal pensions, and would bring in new revenue from communication spectrum leases.
It also would set up a committee of lawmakers to recommend future cuts for an up-or-down vote in Congress by year’s end.
To attract Democratic votes, the package may include a proposal to swap the extension of an expiring break on workers’ payroll taxes for the closing of tax loopholes for corporate jet owners and others.
Obama is still seeking a bigger and grander package, White House officials said.
Kathleen Hennessey in the Washington bureau contributed to this report.
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