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Debt showdown: Boehner rewrites his bill, conservatives climb on

By Charles Babington and Donna Cassata

Associated Press

Published: Friday, July 29 2011 12:50 p.m. MDT

WASHINGTON — House Speaker John Boehner hastily rewrote his stalled debt-limit bill again Friday, and former conservative foes began climbing aboard. Senate Democratic leader Harry Reid signaled he's ready to push ahead with his own version, and President Barack Obama declared "we're almost out of time" in a wrenching political standoff that has heightened fears of a market-rattling government default.

"The power to solve this is in our hands on a day when we've been reminded how fragile the economy already is," the president said from the White House as many U.S. stocks fell in response to a sour report on economic growth and widespread uncertainty over the Washington debt stalemate. "This is one burden we can lift ourselves. We can end it with a simple vote."

A simple vote was hard to come by, just a few days before Tuesday's debt-limit deadline.

On Capitol Hill, Boehner revised his measure and made inroads with reluctant rank-and-file conservatives who have argued that the deficit cuts it contained were insufficient in exchange for a debt limit hike. The leadership pushed toward a late Friday vote.

Rep. David Dreier of California said the revised measure would still raise the nation's debt limit by $900 billion — essential to allow the government to keep paying its bills — and cut spending by $917 billion. But a later increase in borrowing authority wouldn't take effect unless Congress sent a constitutional balanced budget amendment to the states for ratification.

That was a key demand of rebellious conservatives who withheld their votes from the legislation on Thursday night.

That balanced-budget amendment addition made Phil Gingery, R-Ga., a convert. "That's basically what many of us were holding out for," he said after GOP leaders made a fresh appeal to rank and file at a closed-door meeting.

Freshman Rep. Mo Brooks, R-Ala., said the change on the balanced-budget amendment "got a lot of additional Republican votes."

Even Rep. Louie Gohmert, R-Texas, a self-described "beat-up no" after days of arm-twisting, said he was leaning toward "yes."

The White House immediately dismissed the new version, with spokesman Jay Carney calling it "moot and irrelevant" and certain to fail in the Senate.

In a nod to the endgame, however, Carney added: "We do have to wait for that process to play out before we can get focused on legitimately solving this problem."

In the Senate, Reid pressed forward with his legislation, setting up a showdown vote for Sunday. On the Senate floor, Reid said glumly, "This is likely our last chance to save this nation from default."

The Nevada Democrat said he had invited Senate Minority Leader Mitch McConnell, R-Ky., to join him in negotiations.

A divided government is struggling to break the extreme Washington gridlock and head off a first-ever default that would leave the Treasury without the money necessary to pay all its bills. Administration officials say Tuesday is the deadline.

"There are plenty of ways out of this mess. But we are almost out of time," Obama said.

The biggest sticking point is the House bill's call for congressional votes to raise the debt ceiling, in two stages, before the 2012 elections. The president wants one vote before his bid for a second term. No matter how the endgame plays out, one House GOP veteran indicated that the party's internal fight had weakened the hand of its leaders.

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