WASHINGTON — As the nation stood Friday on the edge
of a historic default and markets sank amid grim economic news and the
legislative chaos, President Barack Obama called on both Democrats and
Republicans to abandon their favored debt-ceiling plans and come
together to find a last-minute deal.
“What has become clear is that any solution to avoid default must be bipartisan,” Obama said from the White House.
His remarks came a day after an effort by House
Speaker John Boehner, R-Ohio, to pass his own GOP-backed proposal to
raise the nation’s debt-ceiling stalled in humiliating fashion, leaving
Republicans regrouping and Democrats in the Senate poised to offer their
own plan.
As both chambers continued to struggle to come up
with a way to fashion a bill that can clear both houses, and a new
report showed the economy growing at a snail’s pace, stocks on Wall
Street tumbled at opening, falling 130 points. Late morning, however,
brought a rally.
Senate Majority Leader Harry Reid, D-Nev., whose
caucus was poised to kill the Boehner bill the minute it passed the
House, said Friday that he was going to attempt to advance his own
legislation in the hope that it would be the last proposal standing
before Tuesday, when the government’s borrowing authority expires.
“This is likely our last chance to save this nation from default,” Reid said on the Senate floor.
Boehner and House Republicans spent Friday morning
huddling, attempting to determine whether a path forward for the
speaker’s bill still existed — and were still reeling from a chain of
events that saw Boehner pull his proposal from the floor at the last
moment after it became clear he lacked enough GOP support.
Conservatives are pressing for a provision that would
make a second-stage hike in the debt ceiling contingent on the passage
of a balanced budget amendment to the Constitution.
Inclusion of balanced-budget amendment language had
been a deal-breaker for Rep. Mo Brooks, R-Ala., who had been a no. “Now
I’m a yes,” he said Friday.
Party leaders were still hopeful for an afternoon
vote. But as was the case Thursday, Senate Democrats were poised to use a
procedural mechanism to kill it immediately, clearing the field for
Reid’s package. If Democrats disliked the Boehner bill Thursday night,
the balanced-budget requirement was likely to make it even more
unpalatable.
Even some Republicans in the House admitted that that was a likely result.
“I think the play we called yesterday was the better
play because it had a better chance of passing the Senate,” said Rep.
Steve Womack, R-Ark. “This new play gives a lot more power to the
Senate.”
Boehner told his caucus as much in a closed-door
meeting Friday — that they were surrendering leverage — but many were
not dissuaded.
“Was it a lesson? Yeah, it was a lesson. But some
people still don’t quite get it,” said Rep. Steve LaTourette, R-Ohio,
who has supported the House bill.
The influential Club for Growth however, said that a
balanced-budget provision would cause it to withdraw its opposition —
which could clear the way for more conservatives to support it.
Obama, speaking from the White House Diplomatic Room, labeled Boehner’s bill a waste of valuable time.
The Boehner bill would slice nearly $1 trillion in
spending as a first step in raising the debt ceiling, then would empower
a bipartisan committee to seek deep cuts in federal entitlements and
elsewhere in a second stage. It would likely lead to another showdown
next year.
“It does not solve the problem, and it has no chance of becoming law,” Obama said Friday.
Obama, instead, made it clear that he saw the Senate
as the venue for crafting a workable bipartisan package. Reid conceded
Friday that his proposal, which would reduce the deficit by some $2.2
trillion, would have to be reworked to attract GOP support. Republicans
senators have vowed to filibuster the bill.
“I have invited Sen. (Minority Leader Mitch)
McConnell to sit down with me, and to negotiate in good faith knowing
the clock is running down. I hope will accept my offer,” Reid said.
Reid’s plan would raise the debt ceiling enough to
carry the government through 2012. The compromise talks have focused on
several proposals for elaborate “trigger” mechanisms that would try to
guarantee that additional deficit-reduction measures would be voted on,
but would not hold the debt ceiling hostage to those votes.
Any such compromise likely could only pass the House
if a coalition of Democrats and Republicans can come together to support
it.
Despite Reid’s vow to kill the House bill, Boehner,
along with his lieutenants, hope that successfully passing it Friday
afternoon will give his side leverage in talks that likely will go down
to the wire over the weekend and into next week.
After an evening in which Boehner and House leaders
frog-marched recalcitrant legislators into his office for some
old-fashioned arm-twisting, the House speaker, whose position could be
on the line, was in a forgiving mood Friday.
“I love all of you,” he joked to his caucus. “But I love some of you more than others.”
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