WASHINGTON
With two days to go before America maxes out its ability to borrow, Congressional leaders and the White House Tuesday futilely sought a deal to raise America’s borrowing cap and end the now 16-day long government shutdown.
Treasury Secretary Jack Lew has warned that the country will hit its $16.7 trillion borrowing limit Thursday. Potentially devastating economic fallout could result if the US Congress fails to raise the debt ceiling.
Fitch Ratings, the third-largest debt ratings firm, placed a "negative ratings watch" on the US Tuesday citing political brinkmanship.
"I have made clear for months and months that the idea of default is wrong and we shouldn’t get anywhere close to it," Speaker of the House John Boehner told a press briefing early Tuesday.
It was on his house of the Congress that much of Tuesday’s attention was focused.
House deal falls apart under party dissension
The Republican-controlled House spent much of Tuesday trying to craft a bill that would have appeased enough of far-right Tea Party conservatives to pass the House.
The bill was said to have reopened and funded the government through December 15, and raise the debt limit until February 7. It also would have reportedly included a concession to the Tea Party that would have eliminated healthcare subsidies to members of the Congress, their staffs, the president and the administration, once the Affordable Care Act goes into effect in 2014.
An earlier provision to delay a medical devices tax, which would have been used to partially fund Obama’s signature healthcare overhaul, was reportedly nixed.
Still, House leaders were ultimately unsuccessful in attempting to put together a bill that would have garnered enough votes.
"No votes tonight. We'll see you in the morning," said House Majority Leader Eric Cantor after a full day of politicking.
The efforts in the House halted an earlier plan between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell to develop a bill of their own to reopen and finance the US government, as well as raise the debt limit.
White House meeting with House Democrats leads to unmet optimism
Speaking after meeting President Obama with House Democratic leaders mid-afternoon Tuesday, Minority Leader Nancy Pelosi said she was "optimistic" that a deal could be reached on the debt limit.
"I’m optimistic. I believe because the impact of not lifting the debt ceiling […] alone is so catastrophic that there will be those in the Republican Party who will see the light," she said.
She did, however, insist that Democrats would only vote for a "clean" bill devoid of provisions that sought to modify the president’s healthcare overhaul. If Boehner could not produce such a bill, she said that the speaker would have to rely solely on Republican votes.
"If the Republicans in the House want to put up a bill they should do it soon. But they have to know that if it is as it has been described that they’ll have to do that with one hundred percent Republican votes. We stand ready, our members have signed letters, petitions to open government… that we are there for a clean petition to open government, clean legislation to open government, clean legislation to lift the debt ceiling. That will take us on a path to the budget table when any and all issues can be discussed."
Such a move would have required the support of Tea Partiers.
Senate leaders continue to negotiate amid House falter
Senators Mitch McConnell and Harry Reid had earlier Tuesday attempted to negotiate a Senate bill to address the shutdown and debt limit, but held off after the announcement that a House bill was in development.
Following the House bill’s collapse, aides to Senators Reid and McConnell expressed confidence that a bill, which can win bicameral support, will be agreed to Wednesday. It was the Senate bill that earlier Tuesday sparked hope of an end to the now sixteen day long shutdown, and prevention of potentially catastrophic debt default, could be achieved.
