House rejects debt ceiling bill in ‘political charade’
WASHINGTON — Lawmakers voted against raising the US borrowing cap without making cuts in spending, in a Republican ploy Democrats branded a “charade” unworthy of a vital economic issue.
The Treasury says that unless Congress votes to raise the $14.29 trillion debt ceiling by August 2, Washington could be forced to default on its obligations, in a move that would send shockwaves through the global economy.
Republicans, who won the House of Representatives last November amid a mood of steep anxiety over the ballooning size of government debt, will only back raising the debt limit in return for steep cuts in the deficit.
But they set up a vote on a bill they knew would lose — on raising the debt ceiling by $2.4 trillion without a corresponding trim in spending — to show they were serious about getting the budget shortfall under control.
The measure was voted down 318-97 — with many Democrats siding with Republicans to avoid being branded as blocking austerity measures gloomy voters seem to favor after an era of out-of-control spending.
“Today, we are making clear that Republicans will not accept an increase in our nation’s debt limit without substantial spending cuts and real budgetary reforms,” said Dave Camp, a key Republican player in the budget debate.
The White House had initially argued for a “clean” vote on the debt limit without conditions.
But it later recognized that position was not politically sustainable, and has held several rounds of talks on Republicans on huge spending cuts.
But no deal has yet been reached, as markets seek clarity on an issue vital to US public finances and the wider global economy.
Most observers however feel that a deal will eventually be reached, since the fiscal consequences of failure are so great.
So Tuesday’s vote could give Republican lawmakers cover to argue to their ultra-conservative base that any eventual vote to lift the ceiling secured slashing budget cuts.
Steny Hoyer, the number two House Democrat, had advised his caucus to vote against the Republican bill, saying that failure to do so could expose them to “demagoguery” in the looming 2012 campaign season.
He branded the vote a “political charade,” adding: “if we were adults and acting as adults, we would come together and give certainty to the markets that of course America is going to pay its bills.”
White House spokesman Jay Carney took pains to avoid being drawn into the political theater, saying the decision to vote was “fine.”
He insisted that the White House was confident that talks between Vice President Joe Biden and top Republicans would eventually yield a deal to raise the debt ceiling, despite current political posturing.
“We believe very strongly the impact of not raising the debt ceiling would be calamitous,” he said.
Both Obama and Republicans have agreed on a figure of roughly four trillion dollars in budget cuts that they say is vital to reining in the deficit in the long-term and putting the economy on a sustainable path to fiscal prudence.
But they are still sharply at odds about how to make the savings — and will debate the scope of the cuts at a closed meeting at the White House Wednesday.
Republicans claim Obama is interested in preserving big government programs and wants tax increases which would harm the economy.
The White House says Republican budget plans would place the very survival of popular social programs like Medicare for the elderly at risk, and would also cut vital investments in clean energy and education.
On a day of political posturing, key Democratic Senators Barbara Boxer and Bob Casey called on Treasury Secretary Timothy Geithner to argue lawmakers should not be paid if Washington defaults on its debts.
“If we cannot do our jobs and protect the full faith and credit of the United States, we should not get paid,” the senators said.
Democratic Senator Robert Menendez meanwhile joined 19 colleagues and called on Biden to end billions of dollars in subsidies to oil firms in any deal that would raise the debt ceiling or cut the deficit.