Saying time is running out and House Republicans’ debt limit bill “has no chance of becoming law,” President Obama on Friday urged the Senate to craft a bipartisan solution that would raise the government’s borrowing limit and limit spending now, while setting up a broader debate on tax increases and entitlement cuts later.
“We are almost out of time,” said Mr. Obama, who has largely stayed behind the scenes this week after House Speaker John A. Boehner cut off direct negotiations with the White House a week ago. “There are a lot of crises in the world that we can’t always predict or avoid. … This isn’t one of those crises. The power to solve this is in our hands.”
After calling off a vote at the last minute Thursday, House Republican leaders revised their plan and seemed to have won enough support to pass their bill through the chamber. The revised measure would raise the federal borrowing limit in two stages, with the second increase next year coming only after Congress has passed a sent to the state a constitutional amendment requiring a balanced federal budget.
GOP leaders were preparing new rules of debate that would allow a vote later Friday.
But Mr. Obama said it was time to look to the Senate, a chamber run by Democrats and more used to bipartisan cooperation, for action.
“Today I urge Democrats and Republicans in the Senate to find common ground on a plan they can get support — that can get support from both parties in the House, a plan that I can sign by Tuesday,” Mr. Obama said.
Senate Majority Leader Harry Reid, Nevada Democrat, has proposed his own package of spending cuts and a $2.4 trillion debt increase that would last through the 2012 election, but Republicans question some of the war-spending limits he used to offset the new debt space.
And Mr. Reid and his Republican counterpart, Minority Leader Mitch McConnell, seem at odds.
On Friday morning, Mr. Reid blasted Republicans in a floor speech, Mr. McConnell responded with criticism of Mr. Reid, and as Mr. Reid then took the floor to reply, Mr. McConnell stalked out of the chamber.
“Rather than working these 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,” Mr. McConnell said in his speech.
Mr. Reid later dismissed the new House debt-ceiling plan as unworkable, telling reporters, “What’s being done in the House is not a compromise.”
The Treasury Department has said if Congress does not act to raise the nation’s borrowing limit by Tuesday, the federal government will risk defaulting on its obligations and losing its long-held AAA credit rating. Mr. Obama and other administration officials have said the results would be catastrophic to an economy that’s still slumping, arguing that a credit downgrade could amount to a tax increase on all Americans.
On Friday, he warned that Social Security checks, veterans’ benefits and government contracts would be at risk — but he pointedly did not mention interest payments, which could signal the government is prepared to prioritize those payments if the borrow limit is breached.
The president said Democrats and Republicans are “not miles apart” when it comes to the range of spending cuts that would accompany an increase in the debt ceiling. As for tax and entitlement reforms down the road, Mr. Obama said he would be willing to support “some kind of enforcement mechanism” if it were done in a “balanced” way.
Mr. Obama and the Democrats are seeking an extension of the $14.29 trillion borrowing limit that would carry the country through the 2012 elections, while Mr. Boehner’s plan likely would result in a six-month extension.
“It does not solve the problem and has no chance of becoming law,” Mr. Obama said of the House bill.
But Mr. Boehner worked to secure support for his plan Friday morning, telling his colleagues in a closed-door meeting that they have a chance to highlight their action versus the Senate’s inaction.
“If we pass this today, we will have sent not one, but two bills to the Senate that would end this crisis,” he said, according to a source familiar with his remarks. “All that will stand between the American people and a resolution to this crisis will be the Senate, which has passed nothing.”
Several GOP holdouts, who had forced a last-minute cancellation of Thursday night’s vote as Mr. Boehner and his allies scrambled for support, appeared to be ready to accept Mr. Boehner’s revised plan, with the balanced budget amendment proviso.
“By standing firm, we were able to get a bill that actually cuts federal spending now, caps future spending, and ensures a Balanced Budget Amendment passes Congress before the second increase is enacted,” said Rep. Jeff Landry, Louisiana Republican.
Rep. Michael C. Burgess, Texas Republican, who decided early Thursday to support Mr. Boehner’s deal, walked out of a meeting and said judging by the body language of GOP leaders, he suspected they had secured the votes.
• Sean Lengell contributed to this article.
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