Vote to launch debt ceiling debate
House planning to reject measure sought by Obama
WASHINGTON — Setting the stage for a long summer of heated negotiations, the House plans to reject a proposal today that would increase the nation’s ability to borrow funds without also making dramatic cuts in federal spending.
A day before they huddle with President Obama at the White House, Republicans will hold a vote on the administration’s initial request that the nation’s debt ceiling be lifted above the current $14.3 trillion limit without any accompanying spending reductions.
Both sides recognize such a request is politically impossible, given the mood of the electorate against runaway federal deficits.
House GOP leaders timed the vote tonight to demonstrate that point before all 241 members of the Republican conference visit Obama tomorrow. It will be his first meeting with the entire group of Republicans since they won the House majority in the November midterms.
For months each side’s leaders have talked publicly and privately about how the financial markets would react if the Treasury is unable to raise the debt limit, with speculation that the country would default on its outstanding loans and cause broad panic in the global markets.
With the vote today, Republican leaders believe they have created a buffer by showing their intentions and holding the vote a full two months before Treasury Secretary Timothy F. Geithner set an Aug. 2 deadline for lifting the debt ceiling.
Also, the vote will be held after 6:30 p.m., when the markets will be closed. House leaders do not want a repeat of the September 2008 vote in which the House at first rejected the $700 billion Wall Street bailout and triggered the single largest one-day drop in stock prices ever.
This vote is not expected to be close, as nearly every Republican and many Democrats are likely to oppose what in years past was the routine decision to increase the debt ceiling.
After the vote fails, the focus will return to a bipartisan group of six congressional leaders who have been in private talks with Vice President Joe Biden to come up with a massive spending cut package and allow the debt ceiling to rise. Both sides say they will easily exceed $1 trillion in cuts, with the vice president suggesting that number is only a “down payment’’ to agreement on much greater reductions by the August deadline.
With the Senate out of session this week, the next round of Biden talks is set for next week.
Early proposals for whittling down spending include a plan to drop federal agriculture subsidies and to require larger employee contributions to the pension system for nonmilitary federal workers.
“Those talks, which actually we’ve been meeting for over three weeks now, they have been all positive. Everything is on the table,’’ the House majority leader, Eric Cantor, a Virginia Republican, said Sunday on CBS’s “Face the Nation.’’ “We’ve said, as Republicans, we’re not going to go for tax increases. I think the administration gets that. But we’ve also put everything on the table as far as cuts.’’
The Republican plan would actually increase federal deficits by more than $5.4 trillion over 10 years, which is $4 trillion less than Obama’s original budget proposal. Republicans plan to achieve these savings partly by changing the Medicare system by giving seniors vouchers to buy insurance on the private markets.
The proposal has created a political firestorm on Capitol Hill.
For weeks, Democrats have accused Republicans of trying to “end Medicare as we know it.’’ They have hammered that point home after scoring an upset victory last week in a special House election in the conservative-leaning 26th District outside Buffalo.
During the campaign, Democrats focused almost entirely on the Medicare proposal and are planning to do the same in dozens of districts around the nation where potentially vulnerable Republicans voted for the Medicare change in mid-April.
“They cannot escape from that vote, other than to say I voted against it after I voted for it,’’ said Representative Steve Israel of New York, chairman of the Democratic Congressional Committee. Israel noted that, based on the presidential results from the 2008 campaign, there are 97 other House districts held by GOP lawmakers in which Obama performed better than in New York’s 26th Congressional District. “That should cause some sleepless nights,’’ Israel said.