US Republican debt plan vote postponed

John Boehner, centre, presented the deficit reduction plan that Republicans will vote on [Reuters]

House Republican leaders have abruptly cancelled a vote on a bill to extend the government’s debt limit, cut federal spending and avoid a potential US default on its obligations at home and abroad.

It was initially unclear why the vote, which had appeared imminent, was postponed.

House Speaker John Boehner and other Republican leaders had laboured furiously to line up the 216 votes the debt bill would need to pass the House.

Enough conservative Republicans, initially opposed to the Boehner bill, had been thought to have agreed to back the measure earlier on Thursday. There are 240 Republicans in the House.

Few if any Democrats are expected to support the measure, which faces near-certain defeat in the Democratic-run Senate.

President Barack Obama vowed to veto the measure should it reach his desk because it would bring the controversial debt issue up again in the middle of next year’s election season.

Republicans are divided on the bill. But even if they pass it, the Democrat-controlled Senate and the White House have already pronounced it “dead on arrival”.

“It is really the ultimate example of Congress at its most dysfunctional state,” Al Jazeera’s Kimberly Halkett reported from Washington, DC.

She said the bill was “likely to have the support of only about four Democrats”, meaning it would most probably not make it past the Democrat-controlled Senate.

Halkett added that the bill will only lift the debt ceiling for about eight months, while the White House wants it to be lifted far past 2012.

Deadlock

Partisan deadlock between Republicans and Democrats over how best to reduce the US deficit, and over what period, has blocked an agreement so far to allow the raising of the $14.3tn debt ceiling.

President Barack Obama’s priority was to “lift the cloud and make sure that the United States does not default,” White House spokesman Jay Carney said, five days before an August 2 deadline for raising the US government’s borrowing limit.

A failure to raise the debt limit by August 2 could trigger a crippling default that would shake the global financial system and could tip the United States back into recession.

While most analysts hope a default will be avoided by an eleventh-hour deal, the risk remains for a damaging downgrade of the US’s top-notch credit rating, a move that would raise US borrowing costs and rattle global investors.

Carney said the debt stalemate had “already had significant negative impact on the economy”.

“The American people have made clear they want a compromise,” he said. “Our primary objective has to be to
protect the economy and the American people from economic harm.”

Severe spending cuts

The House of Representatives tentatively scheduled Thursday’s vote to take place between 5:45-6:15pm EDT (2145-2215 GMT).

The bill was presented by the top Republican in Congress, House Speaker John Boehner, who has been cajoling fiscal conservative rebels within his own party to support it, but some of them feel it does not deliver the severe spending cuts they demand.

“We don’t have the votes yet, but we’ll get there,” a spokesman for Boehner said.

But the White House’s Carney said Boehner’s plan would not pass the Democratic-controlled Senate.

He said a successful compromise must significantly cut spending, install a mechanism to tackle tax reform and
entitlement spending in the future, and lift the debt ceiling through next year.

“We need to start doing things that can pass both houses and be signed into law,” he added.