–In Mostly Party Line Vote, House Rejects Senate Democratic Bill
–House Majority Leader: House Will Return To Legislative Session Monday
–Senate Republicans Pledge To Block Reid Bill In Senate
–Washington Waits For Reid and McConnell To Begin Negotiations

By John Shaw

WASHINGTON (MNI) – In a vote orchestrated for both retaliation and
symbolism, the House voted Saturday to reject the debt ceiling package
assembled by Senate Majority Leader Harry Reid.

The House voted 246 to 173 to defeat the Reid bill. It was
considered under special House rules so passage would have required a
two-thirds majority.

After the House vote Saturday, House Majority Leader Eric Cantor
said the House would be in session briefly Sunday for a pro-forma
session but would not resume legislative business until Monday.

The vote was a clear House Republican response to Reid’s move
Friday evening to defeat the dueling debt hike planned crafted by House
Speaker John Boehner.

The Senate voted Friday 59 to 41 to reject Boehner’s debt hike
plan. All Senate Democrats voted to kill Boehner’s bill. Several
conservative Senate Republicans also voted against Boehner’s bill,
presumably because it would increase the debt ceiling.

The House approved the Boehner’s debt hike bill Friday evening on a
218 to 210 vote. No Democrat voted for the legislation. All but 22 House
Republicans voted for it.

After the Senate voted Friday to kill the Boehner plan, Reid then
moved to cut off the Senate debate on his own debt hike package. The
Senate will vote Sunday morning around 1 a.m. on this motion.

Senate Minority Leader Mitch McConnell said Saturday on the Senate
floor that 43 Senate Republicans have pledged to block Reid’s bill when
it comes to the Senate floor.

It will only require GOP 41 votes to block Reid’s bill and
continue the Republican filibuster.

McConnell said Reid’s debt hike bill “isn’t going anywhere.”

Reid, also speaking Saturday on the Senate floor, said he offered
his plan as the basis to begin talks with Republicans. “We welcome
compromise,” Reid said, adding “we have heard very little from
Republicans.”

McConnell has so far declined to enter negotiations with Reid on a
compromise. Democratic senators said McConnell has also urged Senate
Republicans to refrain from talks with Democrats on a debt ceiling
compromise.

Congressional staffers have speculated that McConnell’s reluctance
to enter into immediate talks with Reid is motivated by a desire to
avoid embarrassing Boehner and also because of the sharp criticism he
received from many Republicans several weeks ago when he offered a
compromise package to end the debt ceiling impasse.

It is unclear if McConnell will be willing to begin talks with Reid
after the Senate votes early Sunday to block Reid’s bill.

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

Boehner’s bill would have raised 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 $917 billion in spending
cuts through the imposition of 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 and
passage by the House and Senate of the balanced budget amendment which
requires two-thirds majorities in both chambers.

It is still assumed on Capitol Hill that the final debt hike
package is likely to blend aspects of the Boehner and Reid plans, but it
may be several more days before that compromise emerges — if it does.

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, this coming
Tuesday.

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

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