President Obama, warning that time is running out to lift the federal debt ceiling, said Friday that a House GOP plan has “no chance of becoming law,” and he urged Senate Democrats and Republicans to come together on a “bipartisan compromise.”
Obama spoke as House Republican leaders labored Friday to rescue a debt-limit plan opposed by their party’s arch-conservatives. But he reiterated that the House leaders are wasting their time by trying to pass a measure that includes a short-term raise of the debt ceiling.
On Capitol Hill, the House GOP leaders offered party members a reworked plan Friday morning designed to appeal to the tea party-allied conservatives, and several previously skeptical lawmakers said they would now support it. Members who exited a House Republican Conference meeting said the new proposal would not change the first step of their original two-stage plan to raise the debt limit but would call for Congress to send to the states a balanced-budget amendment to the Constitution as a prerequisite for the second stage of the debt-ceiling increase to take effect early next year.
The House is expected to vote on the plan sometime Friday, members said.
However, Obama warned, the two-step House plan “does not solve the problem.” He urged the American people to keep up the pressure on their elected representatives to reach a compromise and said the two sides in the Senate are not far apart.
Even as he expressed optimism, however, Mr. Obama delivered a stern warning to Congress: "For all the intrigue and all the drama that's taking place on Capitol Hill right now, I'm confident that -- but as I said earlier, we are now running out of time. It's time for everybody to step up and show the leadership the American people expect."
Mr. Obama delivered his remarks from the White House Diplomatic Reception Room -- a setting perhaps chosen to send a message to the House, where diplomacy appeared to be sorely lacking Thursday night. Conservative Republicans on Thursday delivered a stinging rebuke against House Speaker John Boehner, when they refused to support his debt limit plan, which would have increased the U.S. borrowing limit by up to $900 billion while cutting more than $900 billion in spending over the next decade.
Congress has just days left to vote on a plan to raise the $14.3 trillion debt ceiling, the legal limit the U.S. can borrow. By August 2, the Obama administration says, the U.S. will have lost its authority to borrow anymore money and will be "running on fumes."
"We need to reach a compromise by Tuesday so that our country will have the ability to pay its bills on time, as we always have," Mr. Obama said. He emphasized that raising the debt ceiling does not authorize new spending -- it simply ensures that the government can pay for the bills it has already racked up.
The president warned that if an agreement isn't reached, the U.S. could lose its triple-A credit rating. "Not because we didn't have the capacity to pay our bills -- we do," he said. "But because we didn't have a triple-A political system to match our triple-A credit rating."
If the United States' credit rating were downgraded, it would be harder to borrow money, and interest rates would potentially increase across the board. "That's inexcusable," Mr. Obama said. "there are a lot of crises in the world we can't always predict or avoid... This isn't one of those crises."
White House Communications Director Dan Pfeiffer told CBS News White House Correspondent Peter Maer this morning that leaders are waiting for House Republicans to stop political posturing and agree to a bipartisan deal. "The question isn't how we compromise -- it's if the House is willing," he said.
One Republican aide with knowledge of the negotiations told CBS News Capitol Hill Producer Jill Jackson on Thursday night that the next version of Boehner's bill would still require raising the debt ceiling twice this year. However, this new version could make the second debt limit increase contingent upon actually sending a balanced budget amendment to the states -- an action that would take a two-thirds vote in Congress.
This modification appears to be winning over some conservatives. Even Rep. Louie Gohmert, R-Texas, an ally of conservative Reps. Michele Bachmann and Steve King, said this morning he is now open supporting the plan, Jackson reports.
If the House wants to vote on another version of Boehner's bill today, they'll have to go through some procedural hoops first, starting with taking it back to the House Rules Committee to alter it. It's unclear, however, how much progress House Republicans can make after altering their bill. Boehner can only afford to lose 24 Republicans if he plans to pass his bill without any Democratic support.
"I am very pleasantly surprised that they are not twisting and ripping arms off, but I simply cannot raise the debt ceiling if we're not going to change the way we do business," Rep. Jason Chaffetz, R-Utah, said Thursday night.
Still, those looking for a solution remained optimistic.
"I think investors small and large in America should know that despite the fact that we are not there yet, House Republicans' objectives remain the same," Rep. Mike Pence, R-Ind., said Thursday night. "We're going to rest up over the evening and go right back to work in the morning.
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