Day of conflict yields glimmer of hope for debt deal

WASHINGTON -- A day of partisan fighting gave way to a glimmer of hope late Saturday that fresh talks between President Barack Obama and congressional leaders might yield an agreement that could avert a federal government default.

Three hours before the Senate was scheduled to hold a crucial vote on a debt bill sponsored by Senate Majority Leader Harry Reid -- a bill that looked to be headed to the dustbin along with other recent proposals -- the Nevada Democrat reported that new negotiations were showing promise.

Reid said at the request of the White House he was postponing the vote on his bill until 1 p.m. EDT (10 a.m. Pacific time) today "to give everyone as much room as possible to do their work."

"There are many elements to be finalized, and there is still a distance to go before any arrangement can be completed," Reid cautioned.

Still, "I'm glad to see this move toward cooperation and compromise. I hope it bears fruit," said the majority leader, who earlier in the day was giving as good as he was getting in partisan warfare over spending cuts that were at the center of the debate over extending the government's powers to continue borrowing to pay its bills.

With the Senate seemingly headed to another dead end on a debt deal, Republican leader Mitch McConnell of Kentucky, who was widely expected to play a key role in any final agreement, finally made a move on Saturday.

McConnell told reporters he had spoken with Obama and Vice President Joe Biden, and Republicans were "fully engaged" in new debt talks with the White House.

"I am optimistic we will get an agreement in the very near future," he said.

In a confrontation on the Senate floor a short while later, Reid disputed McConnell's claim, saying he had been to the White House and "it's not true" that a new deal was in the works.

As it turned out, the Senate Republican leader, along with House Speaker John Boehner, R-Ohio, were making progress with Biden.

aiming for a 'Trigger'

According to sources, the new talks revolve around ways to enforce spending cuts that would accompany the hike in the debt ceiling. The failure to reach consensus earlier on such "triggers" was proving to be a hole in Reid's bill that was driving away potential Republican supporters.

That left Reid scrambling on Saturday for votes on his bill, while Republicans were sending multiple signals that he should scrap it and try something else.

Meanwhile, the atmosphere on Capitol Hill was growing increasingly frantic, lawmaker speeches more plaintive and emotional, as the calendar turned another day closer to an Aug. 2 deadline -- specifically 12:01 a.m. on Wednesday.

That's when the Treasury Department says it will not be able to borrow additional money for the United States to pay all its bills, a development that would put at risk the government's AAA debt bond rating.

Proposal after proposal has fallen by the wayside, and it was becoming more uncertain how the looming crisis could be averted.

Partisan battles

Friday night, Reid led the Senate in thwarting legislation by House Republicans to cut $2.5 trillion in spending over 10 years and require Congress to pass a constitutional amendment to balance the budget before allowing the government to increase its borrowing beyond this year.

On Saturday, House Republicans claimed payback. They voted to set aside a competing Reid bill that would allow Obama to raise the $14.3 trillion debt ceiling by another $2.4 trillion -- enough to carry to March 2013 -- while calling for $2.2 trillion in spending cuts and other savings.

Both votes were partly for show, as congressional leaders continued to search for some combination of spending cuts, triggers to enforce them, and debt limit timetables that might win enough votes to pass and be signed into law.

In the Senate, Republicans threw more cold water on Reid. Forty-three of them sent Reid a letter Saturday saying they would not vote for his bill.

"We are writing to let you know that we will not vote for your $2.4 trillion debt limit amendment which, if enacted, would result in the single largest debt ceiling increase in the history of the United States," the Republicans wrote.

"In addition to this unprecedented increase in borrowing authority, your amendment completely fails to address our current fiscal imbalance and lacks any serious effort to ensure that any subsequent spending cuts are enacted.

Heller's reaction

Among the signers was Sen. Dean Heller, R-Nev. Heller said in an interview there was no way in Reid's bill for Congress to enforce the spending cuts that he calls for, while it would allow borrowing to continue.

"I believe Reid's bill is the status quo," he said. "The only thing it would allow is more spending, and clearly more borrowing in the future. It puts no restraints on how we do business in Washington."

Reid needs 60 votes to break a filibuster and move his bill forward. Four Republicans -- Scott Brown of Massachusetts, Olympia Snowe and Susan Collins of Maine and Lisa Murkowski of Alaska -- did not sign the letter, suggesting Reid and the 53-member Democratic caucus were three votes short.

McConnell told Reid his bill "isn't going anywhere." He urged Reid to speed a vote on it, saying "let's get it over with." McConnell said it was imperative for Obama to be brought into negotiations on a final deal, whatever it may be.

"The only way we are going to get an agreement before Tuesday is with the president of the United States," he said.

Arguing that his measure was the only one still standing, Reid held firm.

"We are going to continue pushing this because it is the only bill left," he said.

In the House, the Reid bill was shelved in a 173-246 vote, with 11 Democrats voting against him.

Democratic Rep. Shelley Berkley voted for it, while Republican Rep. Joe Heck voted against it.

Harsh debate

Debate was particularly raucous.

An angry Rep. Sander Levin, D-Mich., accused Republicans of "throwing a monkey wrench into the Reid bill before it even leaves the station. It is clear what you are doing."

"The action we will take here will help in the process," responded Rep. David Dreier, R-Calif. He said setting aside the Reid bill would spur fresh negotiations.

"That is pernicious nonsense!" Levin declared.

Heck said he objected to Reid counting $1 trillion in savings from the winding down of military action in Iraq and Afghanistan. Republicans have called that a budget gimmick, arguing there is no "savings" from funds that the president will no longer be requesting and will not need to be spent.

Heck further said the Reid bill lacked "accountability measures," either a balanced budget requirement or "triggers" that would force automatic spending cuts if Congress fails to follow through.

"I hope the vote will show that no further time should be wasted by Senator Reid to move his bill," Heck said.

Democrats and Republicans have negotiated "triggers" as part of various proposals, but have not been able to agree whether those should force just spending cuts or also tax increases or other revenue-raisers.

As for the war savings, which account for more than a third of the projected savings from his proposal, Reid said the nonpartisan Congressional Budget Office has accepted his numbers and he was going to stick by them.

Berkley said in a statement the Reid bill "isn't perfect but it's the most responsible approach on the table and the only one that reduces our deficit by $2.4 trillion, protects Social Security and Medicare and avoids a devastating default that would wreak havoc on Nevada's fragile economy and jeopardize the benefits our seniors and veterans rely on."

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.