US Lawmakers Deadlocked on Raising Country’s Borrowing Limit

Posted July 30th, 2011 at 4:00 pm (UTC-5)
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U.S. political leaders remained deadlocked Saturday over how best to raise the country's borrowing limit and cut government spending, three days ahead of a looming national debt default.

Rival Republican and Democratic plans to raise the country's debt limit of $14.3 trillion and rein in the nation's deficit-laden annual budgets call for many of the same provisions. But agreement on a compromise has proved elusive.

The White House and congressional leaders are expected to talk more on Saturday in hopes of avoiding what would be the first U.S. default. Meantime, the Republican-led House of Representatives easily defeated a rival debt plan produced by the Democratic Senate Majority Leader Harry Reid, just as the Senate Friday night had rejected a plan narrowly approved by the House.

Reid is planning a Senate test vote on his debt plan early Sunday. His plan would cut government spending by $2.5 trillion and raise the legal limit on borrowing enough to fund the government through the end of 2012.

Prior to the House vote Saturday, the Obama administration urged the House to pass the Reid bill. A White House statement said the bill would increase the debt ceiling to a level that will be sufficient for the U.S. to meet its obligations through the end of 2012. The statement said Mr. Obama's senior advisors would recommend that he sign the bill if it were presented to him.

Reid needs 60 votes in the 100-member Senate in the early Sunday vote to end debate on his measure and move to a final vote a day later. But 43 opposition Republicans said they would not vote to cut off debate, lending still more uncertainty to the political standoff.

Democratic leaders in the Senate are hoping to complete their action on a debt limit increase by early Monday morning, just before U.S. stock markets reopen for the week. The deadlocked Washington debt negotiations have roiled investors, with the key Dow Jones Industrial Average of stocks dropping more this past week than it has in any week in the last 14 months.

Republicans are calling for a short-term fix and new consideration of the debt ceiling in early 2012, while Democrats are pushing for a plan to cover the nation's borrowing needs through next year and past the presidential and congressional elections in November 2012.

In his weekly address Saturday, President Barack Obama said the two sides must reach a compromise by the Tuesday deadline so the U.S. will have the ability to pay its bills on time. He said the parties are not that far apart on the issues involved, and said the results of failing to come to an agreement would be “inexcusable.”

Mr. Obama says the Republican plan pushed by House Speaker John Boehner would hold the economy captive to Washington politics once again by forcing the nation to relive the debt crisis in just a few months.

Boehner's plan called for an immediate $900 billion increase of the U.S. debt ceiling in exchange for more than $900 billion in spending cuts over the next 10 years. It offers to raise the debt limit again early next year if Washington can work out more spending cuts and send to the country's 50 states a proposal for a constitutional amendment requiring the national government to balance its budget each year.

In the weekly Republican address Saturday, Senator Jon Kyl said Republicans have been united in the belief that raising the debt ceiling without making significant spending cuts would be “irresponsible.”