Debt crisis continues
WASHINGTON (AP) - With a default deadline drawing ominously near, House Republican leaders are giving the tea party what amounts to a symbolic floor vote on a "cut, cap and balance" debt-limit plan while behind the scenes work continues on a fallback measure that could become the framework for a compromise.
The chamber will vote Tuesday on the plan to let the government borrow another $2.4 trillion - but only after big and immediate spending cuts and adoption by Congress of a constitutional amendment requiring a balanced federal budget.
The plan is doomed in the Democratic-controlled Senate, and the White House has promised a veto.
The cut, cap and balance measure - and the veto threat issued Monday - sparked the latest in predictable tit-for-tat exchanges between combatants of Capitol Hill and in the White House, even as it was revealed that President Barack Obama hosted House Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., at the White House on Sunday.
"We're making progress," Obama reported.
But the White House attacked the cut, cap and balance idea as an assault on cherished programs. The measure doesn't contain any actual spending cuts but promises they will be made in the future.
"What we are witnessing here with this measure is classic Washington posturing, kabuki theater," said White House press secretary Jay Carney, adding that the measure would "dismantle ... our social safety net: Social Security, Medicare and Medicaid."
Despite the veto threat, House Republicans said they would go ahead with plans to pass the bill Tuesday. "It's disappointing the White House would reject this commonsense plan to rein in the debt and deficits that are hurting job creation in America," Boehner said.
After the cut, cap and balance measure stalls, Senate leaders appear likely to try to advance a bipartisan plan to get around the debt limit crisis by giving Obama sweeping powers to order an increase in the borrowing limit. The backup measure faces furious opposition among groups like the Club for Growth and activists like blogger Erick Erickson of Redstate.com, whose opinions carry weight with many conservatives, but it's nonetheless seen as probably the most viable option for avoiding a default in two weeks.
Barring action by Congress to raise the $14.3 trillion debt ceiling, the Treasury will be unable to pay all the government's bills that come due beginning Aug. 3. Administration officials, Federal Reserve Chairman Ben Bernanke and others say the resulting default would inflict serious harm on the economy, which is still struggling to recover from the worst recession in decades.
Majority Leader Harry Reid announced that the Senate will meet each day until the issue is resolved, including weekends.
Tuesday's vote follows the collapse of a weeks-long effort to negotiate a sweeping bipartisan plan to rein in future deficits. Obama demanded that tax increases on the wealthy and selected corporations be included alongside cuts in benefit programs, but Republicans refused.
It appears GOP lawmakers are still negotiating with Obama on a package of spending cuts that might be attached to the emerging Senate compromise - in which Obama is essentially awarded the power to force a $2.5 trillion increase in the debt limit unless overridden by two-thirds of both the House and Senate.
Supporters of the cut, cap and balance measure say it mirrors a budget passed by the House in April that seeks cuts of $111 billion from government spending in the budget year that begins Oct. 1, and another $6 trillion over the coming decade through a requirement that the budget shrink relative to the overall size of the economy.
Additionally, it would require both houses of Congress to approve a balanced budget amendment to the Constitution as a condition for an increase in the debt limit.
Senate Republican leader Mitch McConnell of Kentucky has swung behind the measure. "Not only is this legislation just the kind of thing Washington needs right now, it may be the only option we have if you want to see the debt limit raised at all," he said.
In spite of his warning, McConnell and Reid have been deeply involved in writing a fallback measure that is viewed in both houses as promising.
It would allow the president to raise the debt limit by $2.5 trillion in three installments over the next year without a prior vote by lawmakers. It also would establish a panel of House and Senate members to recommend cuts in benefit programs, with any bipartisan recommendations guaranteed a yes-or-no vote.