House approves debt bill; Senate ready to reject

By David Espo

Associated Press

Published: Friday, July 29 2011 5:10 p.m. MDT

This video image provided by House Television shows the final House vote on the revamped debt-limit bill, Friday, July 29, 2011, on the House floor on Capitol Hill in Washington. The GOP-controlled House passed the bill to avert default, ignoring veto threat and Senate opposition.

House Television, Associated Press

WASHINGTON — Riven by partisanship, the Republican-controlled House approved emergency legislation Friday night to prevent a threatened government default and bundled it off to swift and certain defeat in the Senate.

"We are almost out of time" for a compromise, warned President Barack Obama as U.S. financial markets trembled at the prospect of economic chaos next week.

The final outcome — with the White House and Senate Democrats calling anew for compromise while criticizing Republicans as Tuesday's deadline drew near — was anything but certain.

The House vote was 218-210, almost entirely along party lines.

The legislation would provide a quick $900 billion increase in U.S. borrowing authority — essential to allow the government to continue paying all its bills — along with $917 billion in cuts from federal spending.

It was rewritten hastily overnight to say that before any additional increase in the debt limit could take place, Congress must approve a balanced budget-amendment to the Constitution and send it to the states for ratification.

"Today we have a chance to end this debt limit crisis," declared House Speaker John Boehner, who had been forced by rebels in his own party to put off a scheduled vote 24 hours earlier.

But the change relating to the balanced budget amendment, a concession to tea party-backed conservatives and others, further alienated Democrats. And it diminished prospects of a compromise that can clear both houses and win Obama's signature by next Tuesday's deadline.

At the other end of the Capitol, Senate Democrats waited to reject the bill as swiftly as possible in a prelude to another attempt at compromise.

Senate Majority Leader Harry Reid, D-Nev., had an alternative measure to cut spending by $2.2 trillion and raise the debt limit by $2.7 trillion, enough to meet Obama's terms that it tide the Treasury over until 2013.

Reid invited Republicans to suggest changes, saying, "This is likely our last chance to save this nation from default."

The Senate GOP leader, Mitch McConnell of Kentucky, sounded as if he wanted Reid to go first. "I eagerly await the majority leader's plan for preventing this crisis," he said in a statement noting the House had now passed two bills to avoid a default and the Senate none.

At the same time Reid appealed for bipartisanship, he and other party leaders accused Boehner of caving in to extremists in the GOP ranks — "the last holdouts of the tea party," Sen. Richard Durbin of Illinois called them.

Republicans conceded that the overnight delay had weakened Boehner's hand in the endgame with Obama and Senate Democrats.

But the Ohio Republican drew applause from his rank and file when he said the House, alone, had advanced legislation to cut deficits, and that he had "stuck his neck out" in recent weeks in hopes of concluding a sweeping deficit reduction deal with Obama.

Boehner's measure would provide a quick $900 billion increase in borrowing authority — essential for the U.S. to keep paying all its bills after next Tuesday — and $917 billion in spending cuts. After the bill's latest alteration, any future increases in the debt limit would be contingent on Congress approving the constitutional amendment and sending it to the states for ratification.

"With conservatives insisting on the addition of a balanced-budget amendment requirement, Speaker Boehner's bill will now cut, cap and balance" federal spending, said Rep. Jeff Flake of Arizona as Friday's scheduled vote approached.

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