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House debt plan dies in Senate
The Democratic-controlled U.S. Senate needed mere hours Friday night to reject an increase in the debt limit that House Republicans took days to fashion, meaning more stalemate as potential default looms.
The Senate vote was 59-41, and the Obama White House urged Congress to use the plan of Senate Democratic leader Harry Reid as a basis for compromise.
“Now that yet another political exercise is behind us, with time dwindling, leaders need to start working together immediately to reach a compromise that avoids default and lays the basis for balanced deficit reduction,” said White House press secretary Jay Carney.
He said the Reid bill cuts spending more than the House Republicans would. And it removes the uncertainty of the risk of default.
Democrats have complained that under the Republican two-step plan for raising the debt ceiling, they could be wrestling with the issue again just months from now.
“We can’t afford to subject the country and the economy to this crisis again in six months,” Sen. Jeanne Shaheen, D-N.H., said in a prepared statement after the vote.
“As I have said before, I do not support a short-term deal that just kicks this problem down the road,” she said.
Friday night, Reid revised his plan to allow a three-step process for raising the debt ceiling. Under the plan, one-third vote in each chamber would have to improve the higher debt.
The plan is similar to a backup plan first proposed by Senate Republican leader Mitch McConnell.
The Reid plan would increase the debt limit to $2.5 trillion and cut spending by $2.2 trillion.
In remarks prepared for delivery to the Senate, Shaheen said there are several aspects of the Reid plan that she dislikes. It does not increase revenues and it does not touch mandatory spending.
But she is prepared to support it, she said. She noted that JP Morgan has predicted that a default-prompted lower credit rating could end up costing the country $100 billion a year in higher interest payments.
Sen. Kelly Ayotte, R-N.H., said Senate Democrats have now rejected two serious House proposals that would avoid default.
“We need to work to find a solution with significant spending cuts and budget reforms that prevents default and a downgrading of America’s credit rating,” Ayotte said.
On Thursday, House leaders delayed a vote on their proposal in order to win support from Tea Party Republicans.
Introduced Friday, the new proposal added a balanced budget amendment to the mix, requiring one to be passed in Congress and sent out to the states before the debt limit could be extended a second time.
Both of New Hampshire’s Republican congressmen supported the proposal, which passed 218-210.
“Failing to act, and making Granite State families and businesses endure financial hardship as a result, was not an option,” Guinta said. “This evening I voted against a blank check for the President and against budgetary shell games. This evening I voted for a balanced budget amendment and for fiscal responsibility.”
Charlie Bass stressed that a joint, bipartisan committee will be formed and tasked with cutting spending. A similar approach was used in the World War II era to pay for government, he said.
“This debate has proven that we have to be responsible for our choices. It’s not fair to take money from our children and grandchildren to pay for our reckless spending today,” Bass said.
Reuters contributed to this article.
The Senate vote was 59-41, and the Obama White House urged Congress to use the plan of Senate Democratic leader Harry Reid as a basis for compromise.
“Now that yet another political exercise is behind us, with time dwindling, leaders need to start working together immediately to reach a compromise that avoids default and lays the basis for balanced deficit reduction,” said White House press secretary Jay Carney.
He said the Reid bill cuts spending more than the House Republicans would. And it removes the uncertainty of the risk of default.
Democrats have complained that under the Republican two-step plan for raising the debt ceiling, they could be wrestling with the issue again just months from now.
“We can’t afford to subject the country and the economy to this crisis again in six months,” Sen. Jeanne Shaheen, D-N.H., said in a prepared statement after the vote.
“As I have said before, I do not support a short-term deal that just kicks this problem down the road,” she said.
Friday night, Reid revised his plan to allow a three-step process for raising the debt ceiling. Under the plan, one-third vote in each chamber would have to improve the higher debt.
The plan is similar to a backup plan first proposed by Senate Republican leader Mitch McConnell.
The Reid plan would increase the debt limit to $2.5 trillion and cut spending by $2.2 trillion.
In remarks prepared for delivery to the Senate, Shaheen said there are several aspects of the Reid plan that she dislikes. It does not increase revenues and it does not touch mandatory spending.
But she is prepared to support it, she said. She noted that JP Morgan has predicted that a default-prompted lower credit rating could end up costing the country $100 billion a year in higher interest payments.
Sen. Kelly Ayotte, R-N.H., said Senate Democrats have now rejected two serious House proposals that would avoid default.
“We need to work to find a solution with significant spending cuts and budget reforms that prevents default and a downgrading of America’s credit rating,” Ayotte said.
On Thursday, House leaders delayed a vote on their proposal in order to win support from Tea Party Republicans.
Introduced Friday, the new proposal added a balanced budget amendment to the mix, requiring one to be passed in Congress and sent out to the states before the debt limit could be extended a second time.
Both of New Hampshire’s Republican congressmen supported the proposal, which passed 218-210.
“Failing to act, and making Granite State families and businesses endure financial hardship as a result, was not an option,” Guinta said. “This evening I voted against a blank check for the President and against budgetary shell games. This evening I voted for a balanced budget amendment and for fiscal responsibility.”
Charlie Bass stressed that a joint, bipartisan committee will be formed and tasked with cutting spending. A similar approach was used in the World War II era to pay for government, he said.
“This debate has proven that we have to be responsible for our choices. It’s not fair to take money from our children and grandchildren to pay for our reckless spending today,” Bass said.
Reuters contributed to this article.