House Prepares for Clean Debt Ceiling Vote

The Washington Post reports:

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

A day before they huddle with President Obama at the White House, Republicans will vote on the administration’s initial request that the nation’s $14.3 trillion debt ceiling be lifted without any accompanying spending reductions. Both sides now recognize that such a request is politically impossible, given the electorate’s disapproval of runaway federal deficits.

GOP House 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 since the party won the House majority in the November midterm elections.

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

In addition, the vote will be held after the markets close. 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.

This result is not expected to be close, as nearly every Republican and many Democrats are likely to oppose what in years past was a routine decision to increase the debt ceiling.

If the vote fails as expected, the focus will return to a bipartisan group of six congressional leaders who have been in private talks with Vice President Biden to come up with a massive package of spending cuts and allow the debt limit to rise. Both sides say they will easily exceed $1 trillion in reductions, with the vice president suggesting that number is only a “down payment” to agreement on much greater cuts by the August deadline.