With U.S. default clock ticking, divided House GOP cancels vote

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WASHINGTON (CNN) — After a day of false starts, the Republican leaders of the House canceled plans for a Tuesday night vote on ending the U.S. budget standoff.

“No votes tonight. We’ll see you in the morning,” House Majority Leader Eric Cantor said as he left the Capitol.

The decision, made amid widespread dissension in GOP ranks, sends the partial shutdown of the federal government to a 16th day and brings the United States a day closer to a threatened default. Cantor, R-Virginia, did not answer questions about what may come next.

The Treasury Department says it will hit its borrowing limit on Thursday — and economists warn that failure to raise the that limit by then could spike interest rates with possible catastrophic impact at home and abroad. With the Republican leadership apparently unable to come up with any plan acceptable to its members, the Wall Street bond-rating firm Fitch warned of a possible downgrade of gold-plated U.S. bonds, citing the risk of default from “political brinkmanship.”

House Republicans first proposed their own version of a Senate plan to temporarily end the political stalemate paralyzing Congress, then haggled among themselves over the details throughout the afternoon. But shortly after announcing the planned vote, the House committee that sets the rules for such procedures postponed its hearing, putting in doubt the possibility that the full chamber would consider the measure on Tuesday night.

Rep. Joe Barton, R-Texas, told CNN’s The Situation Room that the delay indicated House Speaker John Boehner didn’t have the votes to get the proposal through the House. Barton added that he would have voted against the measure anyway.

“There no structural reform. There’s no cost savings,” he said. “It’s just, kick the can down the road another six weeks or two months.”

President Barack Obama called for House Republicans to “do what’s right” by reopening government and ensuring the United States can pay its bills, telling CNN affiliate WABC that “we don’t have a lot of time” to avoid a possible default.

Any House proposal would have to go to the Democratic-led Senate for consideration, with pressure mounting for a final agreement before financial markets react to the possibility of a first-ever U.S. default.

According to multiple sources, the House plan called for funding the government through December 15 to end the partial shutdown that entered its third week. It also would increase the federal debt ceiling until February 7.

In addition, the House GOP version would include a provision demanded by tea party conservatives that would prohibit federal subsidies for the President, officials in his administration, members of Congress and their respective staff in buying health insurance under Obama’s signature health care reforms.

Republicans dropped demands to include two other provisions related to Obamacare. One would have delayed a tax on medical devices proponents say is needed to help pay for the Affordable Care Act and the other would have tightened income verification of those seeking subsidies to purchase health insurance.

The House proposal also would forbid the Treasury from taking what it calls extraordinary measures to prevent the government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

Earlier, sources said Boehner was “struggling” to come up with enough votes to pass the GOP counterproposal to the Senate plan. After a two-hour caucus meeting that lasted far longer than scheduled, Boehner told reporters there was no final decision on what the GOP-led House would do.

In a possible signal that he would proceed on a plan opposed by the GOP tea party conservative wing, Boehner said “the idea of default is wrong and we shouldn’t get anywhere close to it.”

Hours later, GOP sources confirmed that the revised Republican plan would be put to a vote.

House Democrats criticized the plan as a reckless attempt to torpedo any chance at compromise.

Minority Leader Nancy Pelosi, following a meeting between Obama and House Democratic leaders, signaled her caucus still wanted “clean” proposals to fund the government and raise the debt ceiling.

“The bill that they’re talking about right now is a bill to default. It’s a decision to default. Once they get over that, then we’ll see what they send to the floor,” she said of Republicans, adding that she remained optimistic Congress would find a path to resolve the matter.

Two senior House GOP sources told CNN’s Deirdre Walsh that the House GOP counterproposal would have been passed in a way that allows the Democratic-led Senate to strip provisions with a simple majority. Walsh and CNN Chief Congressional Correspondent Dana Bash explained that would make it harder for tea party conservatives such as GOP Sen. Ted Cruz of Texas to delay or derail the agreement.

The significance of having the House go first became clear later Tuesday, when sources in both parties told CNN that senators working on the agreement put their work on hold temporarily as Reid and McConnell waited to see how the House proceeded.

Senate Majority Leader Harry Reid and other Democrats immediately slammed the House GOP leadership for what they called a reckless brinkmanship maneuver.

“Extremist Republicans in the House of Representatives are attempting to torpedo the Senate’s bipartisan progress with a bill that can’t pass the Senate,” Reid said on the Senate floor.

He earlier said he was “confident we will be able to reach a comprehensive agreement this week,” reiterating the optimism he expressed Monday night that raised hopes among investors, world leaders and regular Americans that the shutdown stalemate was nearing an end.

The White House also rejected the Republican effort.

WASHINGTON (CNN) —Joe Biden on Capitol Hill to Negotiate Fiscal Cliff

Courtesy Jim Lo Scalzo/EPA/LA Times

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  • Blockwatcher

    The Republicans need new advisors and consultants. Their public image is going downhill fast and can't be saved by the bubble headed sisters, Palin and Bachmann. If the country goes into default there will be rioting in DC like never before.

    • Chris

      Then they should be blaming the part responsible and that is the Democrats. They've even managed to get a bipartisan bill done to fund the government and Obama rejected it. I won't argue the GOP has some PR problems but that is because of the old guard, the old party that has lost the last 2 elections and are perfectly content to just get by doing the same insane ideas that no longer work.

      What do you find so offensive about borrowing/living within our means, following the constitution, following the laws on the books and enforcing family values? This is what the Tea Party wants.

      The definition of insanity is doing the same thing over and over and expecting different results. We are seeing this insanity play out now with the same old tired ideas of both parties. The Tea Party movement represents new ideas and realize it's hard to break the old guard. Of course, they are trying to make them out as villains or extremists because they don't like other parties standing in their way of their addiction to spending other peoples money and "bending" the rules as they see fit.

      • Skip

        All of this was decided years ago when the Affordable Healthcare Law was passed, signed and upheld by the Supreme Court of the USA. What's so hard to understand about that? Isn't that following the Constitution? Good grief!
        Republicans are beating a dead horse and trying to score points with their tea party base and not trying to do anything for the good of the country. You've already wasted billions of dollars on this ridiculous stunt called the Shutdown.
        The GOP is wasting valuable time and money.

  • The World is Ending

    I blame both parties equally for the debt they just keep borrowing money to fund pet projects in their states for the sol purpose of staying in office.