TOPICS > Politics

Senate Plots Next Moves on Debt Limit in Race to Avoid Default

July 29, 2011 at 12:00 AM EDT
Senate Democrats vowed to stay in session around the clock to resolve the debt crisis on Friday. House Republicans modified their plan and President Obama appeals again for compromise. Judy Woodruff and David Chalian discuss the latest on the stalemate on Capitol Hill.
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JIM LEHRER: Senate Democrats vowed to stay in session around the clock to resolve the debt crisis. House Republicans modified their plan, with hopes of swift passage. And President Obama appealed again for compromise.

NewsHour congressional correspondent Kwame Holman has the latest from the Capitol.

SEN. HARRY REID, D-Nev. majority leader: We cannot wait for the House any longer. It is time for Republicans to stop the political games and embrace compromise.

KWAME HOLMAN: Those words from the Senate’s top Democrat, Majority Leader Harry Reid, reverberated across the Capitol, as lawmakers remained divided over how to avoid a potential default.

Reid announced he would move forward on a plan to cut the deficit by $2.2 trillion over the next decade. The proposal would raise the debt ceiling by $2.7 trillion to allow the government to continue borrowing through early 2013.

In addition, Reid’s plan would establish a joint congressional committee to come up with recommendations for additional deficit reduction methods. Unlike Reid’s plan, the one put forward by House Speaker John Boehner would increase the debt limit in two stages, starting with $900 billion in borrowing authority now.

Lawmakers then would vote on a second $1.6 trillion hike in January to pay the country’s bills through the end of next year. Reid said this afternoon Democrats wouldn’t support any short-term extension.

SEN. HARRY REID: We cannot be in this battle all the time. If — right now, the extremists have locked down this Congress. We’re doing nothing. The extremists have locked down the White House. They’re not able to do their work. The country is in an economic malaise. And they want to keep this up?

KWAME HOLMAN: Speaking at the White House this morning, President Obama said Boehner’s plan had no chance of becoming law.

PRESIDENT BARACK OBAMA: What’s clear now is that any solution to avoid default must be bipartisan. It must have the support of both parties that were sent here to represent the American people, not just one faction. It will have to have the support of both the House and the Senate.

KWAME HOLMAN: As Democrats were writing off the Boehner plan, Republican leaders in the House were rewriting it to come up with the 216 votes needed for passage, their solution: to add a provision that would require Congress to pass a balanced budget amendment to the Constitution before raising the debt ceiling a second time.

GOP Rules Committee Chairman David Dreier said the change had strengthened the overall measure.

REP. DAVID DREIER, R-Calif.: This looming crisis is not the fundamental problem. We’re facing this crisis because of a much larger, much longer-term problem. The federal government spends more than it has. If you think about it, Madam Speaker, we don’t have a debt ceiling problem; what we have is a debt problem.

KWAME HOLMAN: And late this afternoon, the speaker himself took to the floor.

REP. JOHN BOEHNER, R-Ohio speaker of the House: I stuck my neck out a mile to try to get an agreement with the president of the United States. I stuck my neck out a mile. Hey, I put revenues on the table in order to try to come to an agreement to avert us being where we are.

But a lot of people in this town can never say yes. A lot of people can never say yes. This House has acted. And it is time for the administration and time for our colleagues across the aisle, put something on the table. Tell us where you are!

(CHEERING AND APPLAUSE)

KWAME HOLMAN: Democrat Chuck Schumer of New York said Boehner’s new plan was even worse than the original.

SEN. CHARLES SCHUMER, D-N.Y.: It wouldn’t just make a default likely. It will guarantee a default. So the Boehner proposal says we won’t default now, but we promise you we will default by January. It is an absurd, absurd proposition.

KWAME HOLMAN: The Senate’s top Republican, Mitch McConnell, accused Democrats of standing in the way of progress.

SEN. MITCH MCCONNELL, R-Ky. minority leader: Rather than working the last few days towards a solution to this crisis the way the Republican majority in the House has, the Democratic majority here in the Senate has been wasting precious time rounding up no-votes to keep this crisis alive.

KWAME HOLMAN: Looking for a way to break the stalemate, the president, as he did in his speech Monday night, called on Americans to make their voices heard.

BARACK OBAMA: If you want to see a bipartisan compromise, a bill that can pass both houses of Congress and that I can sign, let your members of Congress know. Make a phone call, send an e-mail, tweet. Keep the pressure on Washington, and we can get past this.

MAN: Speaker Boehner’s office.

KWAME HOLMAN: That prodding by the president again precipitated a significant spike in external phone calls to congressional offices, jamming phone lines.

And the president’s reelection operation followed up on his comments by urging people over Twitter to contact selected Republican members of Congress. The pressure to reach a deal likely will continue over the weekend, as lawmakers work to beat the Aug. 2 deadline.

JUDY WOODRUFF: For more, we turn to NewsHour political editor David Chalian.

Welcome back, David.

So, does Boehner have the 216 votes?

DAVID CHALIAN: Just a short while ago, I got off with a top aide in his office, and he assures me that they do have the votes, after they rejiggered this plan. Speaker Boehner went to make the plan more attractive to conservatives by adding in that balanced budget amendment.

JUDY WOODRUFF: So, David, what happened last night? Did — did — were there enough Republicans who gave a commitment to Boehner and then changed their mind, or did he just never have the votes in the first place and he misread it?

DAVID CHALIAN: I’m told nobody sort of changed their mind or promised the speaker their vote and then all of the sudden turned and didn’t deliver for him.

What I — my sense of what happened after talking to a lot of people on the Hill today, Judy, is that the Republican leadership team was trying a bit of bravado, right, showing a lot of confidence. Momentum was coming their way. Some of these Tea Party freshmen really understood — started to understand the speaker’s argument on this, on why they needed to pass something.

And so I think that they started getting a little bit ahead of themselves, thinking they had the votes. As they got very close to the wire, they realized they didn’t have the votes. And what Speaker Boehner decided was, we — instead of trying to twist every arm and getting the 216 votes last night to get something out of the House, he was aware — he’s aware that something — they’re going to need another vote.

Something is going to go to the Senate and then something is going to come back. And so he’s going to need that last bit of leverage with his members not last night, but at the final vote down the road to get something to the president’s desk.

JUDY WOODRUFF: So that being the case, what happens after this? It’s got to go to the Senate. The Senate has said, we’re not going to touch the Boehner bill that’s coming out of the House.

So, what happens?

DAVID CHALIAN: Right. Senate Democrats said that before it became a more conservative bill today, right?

So this — this bill that Boehner is producing out of the House tonight is clearly dead on arrival in the Senate. But here is what Harry Reid’s plan is now. He has a deadline of midnight tonight. And this is due to a lot of sort of Senate procedures that we don’t need to go into and get in the weeds on.

But in order to get something to the president’s desk in time for that Tuesday deadline, Harry Reid must file a bill tonight by midnight. So, what he’s going to do is take whatever the House passes, probably, and just gut it, basically, and put his own bill in. Now, as you and I are talking here, he’s trying to see if he can work out a deal with Senate Republicans and put forward tonight perhaps a compromise position.

If he can’t do that, he’s going to have to do this bill that Harry Reid has been talking about that Kwame just mentioned in the piece, the sort of Democratic version of how to raise the debt ceiling, and the clock starts ticking for a series of votes, the first of which would be at 1:00 in the morning on Sunday, then 7:30 in the morning on Monday, and then finally on Tuesday in the afternoon, with only a few hours to go before the government would risk default.

JUDY WOODRUFF: And, David, I am told that the vote has just now begun on the — the final vote of passage of the Boehner plan on the debt ceiling. And it will take 15 minutes, so we will know a little later in the program.

But, given what you just said, is there common ground to reach an agreement between what the House wants and what the Democrats want and the president?

DAVID CHALIAN: Right. You heard the president again say today, we’re not that far apart.

And there is a ton of common ground, and I think that gets lost here. Remember, both sides, it’s spending cuts only, no tax increases, no entitlement reform. So there’s common ground there right away. The other key part of common ground between the two bills, the two versions here, is this committee of 12 in the Congress, a joint committee, equal number of Republicans and Democrats, House members and Senate members, to work on future deficit reduction.

That grand bargain that Speaker Boehner and President Obama couldn’t get, this committee would try to work on that sort of kind of tax reform, additional spending cuts, touching entitlements and what have you.

So, in both bills is this committee. The big question, the big divide is, how do you enforce what that committee of 12 comes up with in the future? How do you enforce that it becomes law, the cuts that they come up with in the future?

JUDY WOODRUFF: And the president, the White House is all right with this idea?

DAVID CHALIAN: Well, they’re OK with this idea of this committee coming up with ideas.

But in the enforcement, the White House — I spoke to a White House aide earlier today. They would like to see, let’s put in some real bad punishments for both sides that taxes go up or dramatic spending cuts happen automatically if what this committee comes up with doesn’t become law.

Speaker Boehner, of course, says, no, no, no, we’re going to do this again. Let’s tie it to debt ceiling, that that should be the enforcement, that we’re not going to get this second round of an increase in the debt ceiling if indeed what that committee of 12 comes up with doesn’t become law.

JUDY WOODRUFF: So, just — so, just to be clear, this second round that the Republicans have been talking about, is that likely to survive, or what?

DAVID CHALIAN: The president — my sense from the White House is they don’t mind the notion of a second round generically. What they mind is this environment that we’re seeing now, this countdown, they do not want the second round to get another increase in the debt ceiling tied to more spending cuts.

They want to decouple these processes, deal with the spending cuts and deal with the deficit reduction on one track, and have future increase in the debt ceiling on another track. John Boehner and his House Republicans say, no, no, no, that’s the only leverage we have got. We need to make sure these two remain combined. That is where we don’t know who will blink first.

JUDY WOODRUFF: Well, I know what you’re going to be doing this weekend…

DAVID CHALIAN: All weekend long

(LAUGHTER)

JUDY WOODRUFF: … what you were doing last weekend.

DAVID CHALIAN: Yes, exactly.

JUDY WOODRUFF: David Chalian, thank you.

DAVID CHALIAN: Thank you.