Before the vote Majority Leader Harry Reid again called the plan 'radical.' Senate rejects 'Cut, Cap, Balance'

The Democratic-controlled Senate voted Friday to block a Republican measure that would force Congress to pass a stringent balanced budget amendment and cap spending before increasing the debt ceiling.

The legislation, a conservative priority, never had a chance of passing, but the strictly party-line 51-46 vote to table the “Cut, Cap and Balance” bill highlighted the partisan divide in Washington over how to tackle spending and raise the nation’s $14.3 trillion debt limit.


Before the vote, Majority Leader Harry Reid (D-Nev.) again called the plan “radical” and “one of the worst pieces of legislation to ever be placed on the floor of the United States Senate.”

The vote handed conservatives a chance to showcase their strategy for restricting future spending in Washington, but it faced a veto from President Barack Obama, making it more of a symbolic vote for Republicans to put their mark on deficit reduction.

The Senate’s rejection of Cut, Cap and Balance gives extra breathing room for President Barack Obama and House Speaker John Boehner (R-Ohio) to hammer out a deal on a possible multitrillion-dollar deficit-cutting package. With an agreement taking shape, Reid canceled Senate work this weekend and put on ice a fallback plan that he and Minority Leader Mitch McConnell (R-Ky.) had hatched to avert a default.

“During the course of the week, circumstances have changed,” Reid said.

Unless Congress raises the debt limit in 11 days, Treasury officials say the government will run out of money to pay its bills and default on its loans for the first time in history. That urgency has gripped members of both parties, with Wall Street, states, federal agencies and the American public on edge about the absence of a deal so late in the game.

“There’s no question that the fiscal challenges in front of us demand a bipartisan solution, but the clock’s running,” Sen. Sheldon Whitehouse (D-R.I.) said in a floor speech Thursday night, part of an hourslong debate that continued Friday morning. “The sand is rapidly running out of the hourglass and we have to work on making the necessary changes to get our fiscal house and its foundation in order.”

After meeting Treasury Secretary Timothy Geithner for breakfast Friday, his predecessor, Republican Hank Paulson, called on Congress to tackle budget reductions and entitlement and tax reform to rein in federal spending, but also warned of the dire consequences of failing to lift the debt limit.

“The sense of urgency is clear — failing to raise the debt ceiling would do irreparable harm to our credit standing, would undermine our ability to lead on global economic issues and would damage our economy,” Paulson, George W. Bush’s Treasury secretary, said in a statement.

While some Democrats have voiced support for a constitutional balanced budget amendment, the version Republicans put on the floor Friday is much stricter than previous versions since it would enshrine in the constitution a two-thirds super majority requirement for any tax increases.

Senate Budget Committee Chairman Kent Conrad (D-N.D.), a member of the “Gang of Six” that unveiled a bipartisan deficit-reduction framework this week, quoted a top adviser to Ronald Reagan who said: “This is quite possible the stupidest constitutional amendment I think I have ever seen. It looks like it was drafted by a couple of interns on the back of a napkin.”

Republicans objected to Democrats’ characterization of the plan, assailing them for negotiating a debt deal behind closed doors and failing to put forth a plan of their own.

“The majority leader and his party has not brought one piece of legislation to this floor. The president has not offered one number, one proposal in writing that we can work with,” said Sen. Dan Coats (R-Ind.), a former senator who was swept back into Washington by the tea-party wave last year.

“We have not had the opportunity to debate for one minute anything that the other side has offered. And so we being something forward and it’s called a worthless piece of junk? Is that what the American people sent us here to do?”

The GOP-controlled House passed Cut, Cap and Balance earlier this week on a mostly party-line 234-190 vote. The plan called for $111 billion in spending cuts in fiscal year 2012, gradually capping federal spending to just under 20 percent of Gross Domestic Product through 2021, and Congress to send states a constitutional amendment requiring a balanced budget in exchange for a $2.4 trillion hike to the debt ceiling.

After Friday’s vote, Reid said he’s now awaiting action from the House since the potential deficit deal includes tax revenues, and revenue measures must originate in the House.

“The path to avert default now runs first to the House of Representatives,” Reid said. “That’s what the Constitution demands. We in the Senate must wait for them.”

Boehner was quick to respond on the House floor, accusing Senate Democrats and Obama of leading from behind.

“The House has acted. … We’ve done our job. The Democrats who run Washington have done nothing,” Boehner said. “They can’t stop spending the American people’s money. They won’t and they refuse.”

Rep. Jason Chaffetz (R-Utah), a lead sponsor of the House-passed bill, told POLITICO: “They’re a bit in panic mode. They have no plan.”