July 30, 2011. Washington. With just over 48 hours until the nation runs out of borrowed money to pay its bills, Congressional leaders have taken charge and attempted to rally their party’s troops behind them. In what began as a slew of proposals to solve the nation’s debt ceiling crisis, the stalemate has been dwindled down to two rapidly changing proposals.
Speaker of the House John Boehner (R-OH) produced a revised House Republican bill which he was able to push through the GOP controlled House yesterday by a vote of 218 to 210, with a handful of Republican Congressmen joining with the Democrats in opposition. Immediately following, Senate Majority Leader Harry Reid (D-NV) led a 59 to 41 coalition of all Senate Democrats, both Senate independents and even 6 Senate Republicans, to table the House GOP bill indefinitely.
For his part, Sen. Reid has promised to draft a new, compromise Senate bill which he called not the final option, but “the only option”. In it, and the reason for the bi-partisan Senate coalition, is a promise to vote on not only a future financial overhaul committee proposal to streamline entitlements and taxes, but also to vote on a Balanced Budget Amendment to the US Constitution. Stopping short of guaranteeing its passage, which the Majority Leader called ‘bizarre’, the only sticking demands left on the Democrats’ side are an increase in the debt ceiling at all, and a newly slipped in guarantee of troop withdrawls from Iraq and Afghanistan.
Aside from that, the only major disagreement comes over the timing and amount of cuts and debt ceiling increases. President Obama and his fellow Democrats want an 18 month solution totaling $2.1 trillion in cuts and a $2.4 trillion dollar increase in the debt ceiling. Speaker Boehner and his Republican allies are insisting on only a 6 month package totaling $917 billion in cuts and an increase of $900 billion to the debt ceiling. That, according to the President, would have the nation repeat the exact same crisis only 6 months from now, and right in the middle of the Presidential primary and caucus season.
Accused of playing politics with the nation’s financial well being, Republican leaders argue that they simply don’t trust their Democratic colleagues to bring either future votes to the floor – the overhaul committee recommendations or the Balanced Budget Amendment. Sen. Reid argued that he couldn’t guarantee passage of a future bill and referred to the demand as “bizarre”.
In the end, it comes down to a 6 month fix or an 18 month fix. Each of the other items appear to be somewhat flexible to both sides. If there is going to be one difficult task in solving the debt ceiling crisis before zero hour two and a half days from now, it’s going to be trying to find a compromise that the so far unwavering Tea Party wing of the GOP will sign onto. Without that block of House Representatives, Speaker Boehner won’t be able to hold his fragile coalition together and pass any compromise legislation.
Senator Reid has promised a Senate vote later tonight on his revised compromise legislation, which Speaker Boehner has already promised to defeat in the House. If that happens, Congress will have Sunday to put something together that all sides can agree on. With six straight days of losses to the nation’s stock markets, global investors are getting nervous that a compromise can be reached. If the stalemate hasn’t been resolved by Monday, it’s probably a good bet the country’s creditors will have something to say.