July 22, 2011, 11:48 a.m. EDT
Senate rejects House debt-ceiling bill
By Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) — Senators voted down a House-passed bill on Friday that would raise the debt ceiling and require a balanced budget amendment, as Senate Majority Leader Harry Reid said talks between the White House and congressional Republicans were continuing.
The Senate was expected to reject the bill and voted 51-46 to kill further consideration of it. Obama had said he’d veto it and continued to press Friday for as big a deficit-cutting agreement as possible. Boehner told fellow Republicans that he’d continue negotiations over the weekend.
Reid said on the Senate floor that Obama and Boehner are closing in on an agreement that would pave the way for an increase in the debt ceiling.
Reid also said he wouldn’t bring up a plan he’d been working on with Senate Republican Leader Mitch McConnell that would raise the debt ceiling, since Obama and Boehner are working on a deal.
“The Speaker of the House and the president have been working to reach agreement on a major deficit-reduction measure. I wish them both very well,” Reid said.
Obama and Boehner are reportedly nearing a deal that could cut about $3 trillion in spending but leave tax increases for later. Delaying tax increases could make the deal a hard sell to congressional Democrats.
Friday morning, Boehner denied that a deal was imminent.
Obama, meanwhile, told a town-hall meeting in Maryland that some tax increases should be part of a deal and insisted that the U.S. must pay its bills.
“We have never defaulted on our debt,” Obama said. “We’re not going to do it now.”
Time is running short for an agreement. The Obama administration says the $14.3 trillion U.S. debt ceiling needs to be raised by Aug. 2 or the government will begin to default on its obligations.
Robert Schroeder is a reporter for MarketWatch in Washington.