House debate is no tea party

WASHINGTON -- House Speaker John Boehner abruptly canceled a vote on his plan to lift the federal debt limit late Thursday after failing to persuade conservatives to back the measure and help him avert an economy-rattling default.

After a night of legislative chaos, with control of his caucus slipping in dramatic fashion from his grasp, Boehner, R-Ohio, yanked the bill from the House floor and prepared to make changes aimed at appealing to his tea party-influenced right flank. Republican aides said they hoped for a vote today.

But with GOP leaders unable to offer assurances that the needed support would materialize, Senate Democrats laid plans to proceed with their own debt-ceiling plan in hopes of pushing a measure through Congress by Tuesday, when U.S. Treasury officials say they could start running short of cash to pay the nation's bills.

The drama developed after debate on Boehner's debt limit bill had concluded and lawmakers were minutes away from what was expected to be a cliffhanger vote. Suddenly, action on the House floor shifted to noncontroversial measures, leaving lawmakers debating whether to rename a post office in Hawaii.

Outside the House chamber, Boehner summoned members of the holdout GOP South Carolina delegation to his second-floor office just off the Capitol Rotunda. But he appeared to make little headway and, within minutes, freshman Reps. Mick Mulvaney and Jeff Duncan left the meeting, saying they were heading to a nearby chapel to pray for their leaders.

Rep. Tim Scott, R-S.C., later joined them, and the trio, who have steadfastly opposed efforts to grant the Treasury additional borrowing authority, said Boehner's pitch had not been persuasive.

A short while later, the South Carolinians gathered with other undecided Republicans in the offices of House Majority Whip Kevin McCarthy, R-Calif., a usual hangout for many of the 87 freshmen. There, Boehner, McCarthy and House Majority Leader Eric Cantor of Virginia pleaded with their fellow Republicans for support.

Aides said some holdouts objected to an item in the bill related to the Pell grant college loan program, complaining that it amounted to a $17 billion spending increase. Some members also wanted to see stronger language calling for a constitutional amendment to require a balanced federal budget, aides said.

senate waited

Senate Democrats had been waiting to put the Boehner bill to a quick death in a late-night vote. But with House Republicans locked in another closed-door meeting, Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor that Boehner and his allies appeared to be "having trouble passing their bill" and warned that Congress faced the prospect of yet another wasted day.

The chaos in the House left Congress no closer to a resolution over the debt limit days before the Aug. 2 deadline. The national debt hit the current
$14.3 trillion limit in mid-May. Unless Congress acts, the government will be in danger of defaulting on its obligations as early as Tuesday.

The impasse is shaking Wall Street and the confidence of business leaders. Early Thursday, chief executives of some of the largest U.S. financial companies wrote a letter to President Barack Obama and Congress urging them to strike a deal this week.

"The consequences of inaction -- for our economy, the already struggling job market, the financial circumstances of American businesses and families, and for America's global economic leadership -- would be very grave," they wrote.

Liberal activists and tea party organizers found themselves aligned in opposition to the Boehner bill. MoveOn.org staged a rally on the Capitol grounds, where Democratic lawmakers decried the legislation's deep cuts to government agencies. They also complained that the measure would set up a second fight over the debt limit next year .

FreedomWorks Chairman Richard Armey, the former House majority leader and a tea party backer, called congressmen from Texas and urged them to vote no. Mark Meckler and Jenny Beth Martin, the co-founders of Tea Party Patriots, traveled to Washington to decry the spending cuts in Boehner's bill as "fake" and "phantom."

During a speech at the National Press Club, Rep. Michele Bachmann, the Minnesota Republican running for president, repeated her assertion that the country would not suffer in a default.

"I don't believe for a moment we will lose the full faith and credit of the United States," said Bachmann, who has argued that the Treasury would be left with enough cash for critical needs while the rest of government would be subjected to "tough love."

"I am committed to not raising the debt ceiling."

reid preparing bill

If the House proves unable to pass its bill, action is likely to shift to the Senate, where Reid was preparing to proceed with his own debt limit measure, perhaps by this evening. But it was not clear the Reid bill could win approval, either, and talks over a bipartisan compromise have failed to yield results.

Throughout the day, House Republican leaders had predicted their legislation would pass the House and move on to the Senate.

At an early-afternoon news conference, Boehner challenged Reid to drop his plans to kill the House bill and beseeched "my colleagues in the Senate" to "pass this bill and end this crisis."

"We have a reasonable, responsible bill put together by the bipartisan leaders here in Congress. There's no reason for them to say no," Boehner said. "It's time for somebody in this town to say yes. ... When is somebody on the other side of the aisle going to take yes for an answer?"

But House Democrats appeared united in opposition to the measure, which would set up a two-stage process for raising the debt limit. The first stage would cut spending by $917 billion over the next decade, primarily by making deep cuts to government agencies. The debt limit would be raised by $900 billion, granting the Treasury a reprieve until February or March.

The second stage would involve creation of a new committee comprising 12 lawmakers from both parties and both chambers. The committee would be tasked with identifying another $1.8 trillion in cuts before year's end. If the committee's recommendations were adopted, Obama would be authorized to raise the debt limit into early 2013 without explicit congressional approval.

In a speech Thursday morning on the Senate floor, Reid said: "Republicans cannot get the short-term Band-Aid they will vote on in the House today. It will not get one Democratic vote in the Senate. ... The economy needs more certainty than the speaker's proposal would provide."

Democrats were backing a variant of the Boehner bill that Reid planned to introduce. That measure would make the same cuts to agency budgets and establish the same debt-reduction committee. But Reid's legislation would also count more than $1 trillion in savings from winding down the wars in Iraq and Afghanistan, an accounting move Republicans decried as a gimmick. More important, the Democratic bill would extend the debt limit into 2013.

Senate Minority Leader Mitch McConnell, R-Ky., pledged his support for the Boehner bill.

McConnell argued that Democrats would support the Boehner legislation if not for the requirement for a second debt limit vote early next year.

"It doesn't allow the president to avoid another national debate about spending and debt until after the next presidential election," McConnell said.