WASHINGTON -- A Republican plan that would have hiked the nation's debt ceiling for only six months and left the country's spending captive to a "Super Congress" failed to advance in the House Thursday night, with Democrats and Tea Party-backed Republicans opposing the plan.
House Speaker John Boehner (R-Ohio) had initially scheduled a 6 p.m. vote on his measure which, in addition to raising the debt ceiling, would have cut $915 billion in spending and set up a 12-legislator commission to compel another $1.8 trillion in reductions over 10 years. The vote was then postponed to later Thursday night, but House Majority Whip Kevin McCarthy (R-Calif.) announced just before 10:30 p.m. that a vote would not occur until the following morning at least.
Boehner had already gone back and restructured his plan, after the Congressional Budget Office revealed Tuesday that it contained only $850 billion in cuts -- less than the plan put forth by Senate Majority Leader Harry Reid (D-Nev.).
But even after his plan was re-scored -- and he spent more than a day leaning on reluctant members -- Boehner was short at least three votes, sources said.
The Hill reported that the $17 billion in funding for Pell grants contained in the bill, added in part to lure some Democrats, was a major stumbling block for some members. And many Tea Party-backed Republican freshmen oppose any increase in the debt ceiling whatsoever.
Boehner and his leadership team worked for hours, but they were unable to salvage the bill and secure the votes, marking a stunning failure for a party leader on a crucial piece of legislation.
It was unclear if Boehner would try to bring the bill up again, or if the way was now clear for Reid to advance his plan, which would cut $2.2 trillion over ten years and raise the debt ceiling enough to last into 2013.
Democrats suspected Boehner's efforts were done. "If he can’t get the votes tonight he’ll never get them. You can’t put this toothpaste back in the tube," one Senate leadership aide said.
The high-stakes showdown marks the first time in U.S. history that the nation has come so close to being unable to pay its bills. The debt limit -- $14.3 trillion -- was hit in May, and Treasury Secretary Timothy Geithner has been using emergency measures since then to juggle the books. He has warned that if the limit is not increased by Aug. 2, the federal government will risk defaulting on its obligations.
Raising the debt ceiling has historically been a routine procedure; Congress has done it dozens of times in the past with no strings attached.
Yet even as Geithner and other economists have warned of calamitous consequences if the nation defaults, Tea Party-backed Republicans have insisted on linking payment of the country’s bills to huge cuts in future spending.
That position started out as a relatively popular one, with many Americans also opposed to raising the debt limit altogether. But many have since changed their minds; recent polls have shown that while most Americans think spending cuts are important, they also believe that the debt limit must be increased before the federal government defaults.
As credit rating agencies have warned that they may downgrade the United States' debt, a move that could increase interest rates on home loans, student loans, and credit card bills, Americans have become more and more concerned. The slight hike in interest rates that would result from the country losing its AAA credit rating would also mean the federal government would face an extra $100 billion a year in borrowing costs.
Ironically, the speaker wound up in such a tough spot after he walked out of talks at the White House, where he was negotiating a "grand bargain" with President Barack Obama and congressional leaders. Boehner left, he said, because the president was seeking too much in revenue. Yet while the sides differed on the details, the deficit reduction package would have ultimately been larger than either Boehner's or Reid's, and would have included around $1 trillion in revenues paired with some $3 trillion in cuts.
Republicans have been adamant that taxes cannot be raised on the wealthy, and that corporate tax loopholes and oil subsidies cannot be ended. Many members of the Tea Party have continued to insist, meanwhile, that warnings of catastrophe were exaggerated and the debt ceiling should not be raised at all.
House Minority Leader Nancy Pelosi (D-Calif.) released a statement soon after Boehner gave up for the night, suggesting he had simply gone too far.
“Hopefully, now the Republicans will come back to the table to negotiate a bipartisan, balanced agreement that is overwhelmingly supported by the American people," Pelosi said. “Republicans have taken us to the brink of economic chaos. The delay must end now so we can focus on the American people’s top priority: creating jobs and growing the economy.”
What happens now depends on whether Boehner keeps trying.
Even if Boehner is able to get his bill through the House, a Senate Democratic aide told The Huffington Post that Reid would quickly move to defeat the measure, then put his own package up for a vote.
Democrats may also focus on getting Minority Leader Mitch McConnell (R-Ky.) back to the negotiating table. Exactly what McConnell would demand was unclear, but Democrats could propose some sort of trigger mechanism that would force deeper cuts later in exchange for a debt ceiling hike now -- an idea that GOP lawmakers may find agreeable, but which advocates for the poor and elderly believe would be devastating to the social safety net.
The savings in Reid's plan come primarily from discretionary spending cuts and the drawdown of troops from the Iraq and Afghanistan wars. Like Boehner's plan, it would set up a super committee of 12 lawmakers to propose additional cuts, including entitlement reforms, which would then go to the House and Senate for simple up-or-down votes. But Reid’s version, unlike Boehner's, guarantees the debt ceiling is extended into 2013, which would push it past the next elections and which many ratings agencies would prefer.
If Reid can get the legislation out of the Senate -- where there would be at least one filibuster vote -- the measure might be able to attract enough Democrats and Republicans to pass it in the House. There also remains a chance that leaders could revive McConnell's idea of voting to give the White House authority to make cuts and debt limit hikes in three steps.
Jennifer Bendery and Elise Foley contributed reporting.