–Senate Majority Leader Reid: House GOP Rift Threatens Default
–Debt Hike Impasse An ‘Embarrassment’ For U.S.
–His Revised Bill Would Cut $2.4 Trillion
–Received ‘Very Sobering’ Briefing From Geithner Friday
–Senate Minority Leader: Hammers Senate Dems For Blocking Boehner

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid said Friday
that he is ready to move his debt ceiling bill later today, scheduling a
key procedural vote sometime Friday.

In remarks on the Senate floor, Reid said the debt limit impasse is
being caused by a block of radical Republicans in the House who are
unwilling to compromise and untroubled by the prospect of a default on
America’s debt.

Reid said he can no longer wait for the House to go forward
because House Speaker John Boehner is unable to get enough votes to pass
his debt hike plan.

Reid touted his debt hike bill, but also signalled that he is open
to altering it.

“I have no pride of authorship,” he said, adding “I have
compromised my entire life.”

Reid’s plan would cut spending by $2.4 trillion over ten years and
allow for passage of a $2.4 trillion debt ceiling increase.

Reid said congressional Republicans should “declare victory” on the
debt ceiling and pass his plan.

Reid said he spoke with Treasury Secretary Tim Geithner Friday
morning and he received a “very sobering” briefing. He said Geither said
that disruptions in financial markets are already occurring.

“This is a pretty good deal,” he said.

Speaking next, Senate Minority Leader Mitch McConnell blasted
Senate Democrats for threatening to block Boehner’s bill if it comes
over from the House.

Such an action would threaten the nation with default, he said,
adding that he finds it inconceivable that President Obama would veto
Boehner’s bill if it reached his desk.

Boehner’s plan would raise the debt ceiling by $900 billion this
year and $1.6 trillion next year. The initial $900 billion debt ceiling
increase would require Congress to pass $1.2 trillion in spending cuts
through imposing caps on discretionary spending.

Approval of the second tranche of $1.6 trillion would require
passage of $1.8 trillion in spending cuts in entitlement programs.

Under Boehner’s plan, the House and Senate would also have to vote
on a balanced budget constitutional amendment between this October and
the end of the year.

The U.S. has already reached its $14.29 trillion debt ceiling.
Treasury Secretary Tim Geithner has said that Congress must pass
legislation increasing the debt ceiling by August 2.

** Market News International Washington Bureau: (202) 371-2121 **

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