House sets vote on debt, to focus on budget talks with White House

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Source: The Washington Post

Setting the stage for a long summer of heated negotiations, the House plans to reject a proposal Tuesday that would increase the nation’s ability to borrow funds without also making dramatic cuts in federal spending.

A day before they huddle with President Obama at the White House, Republicans will hold a vote on the administration’s initial request that the nation’s debt ceiling be lifted above the current $14.3 trillion limit without any accompanying spending reductions. Both sides now recognize such a request is politically impossible, given the current mood of the electorate against runaway federal deficits. House GOP leaders timed the vote Tuesday night to demonstrate that point before all 241 members of the Republican conference visit Obama on Wednesday. It will be his first meeting with the entire group of Republicans since they won the House majority in the November midterms.

For months each side’s leaders have talked publicly and privately about how the financial markets would react if the U.S. Treasury is unable to raise the debt limit, with speculation that the country would default on its outstanding loans and cause broad panic in the global markets. With the Tuesday vote, Republican leaders believe they have created a buffer by showing their intentions and holding the vote a full two months before Treasury Secretary Timothy H. Geithner set an Aug. 2 deadline for lifting the debt ceiling.

In addition, the vote will be held after 6:30 p.m. Tuesday, when the markets will be closed during the roll call. House leaders do not want a repeat of the September 2008 vote in which the House at first rejected the $700 billion Wall Street bailout and triggered the single largest one-day drop in stock prices ever.

Read more: http://www.washingtonpost.com/politics/house-sets-vote-on-debt-to-focus-on-budget-talks-with-white-house/2011/05/27/AGd7zsEH_singlePage.html