Moments after the Senate voted to kill House Republicans’ Cut, Cap & Balance plan by a vote of 51-46, Senate Majority Leader Harry Reid took the floor and made a surprise announcement: He will not move to pass legislation to increase the debt ceiling in the Senate. Reid and Senate Majority Leader Mitch McConnell had been working on a deal of their own and Reid had called for the Senate to stay in session through the weekend to take votes that could get something done before the Aug. 2 deadline. But on Friday morning, Reid said the Senate would step back and wait to see what the House sends to them — adding speculation that President Obama and House leaders are close to a deal. From Reid’s remarks:
Earlier this week the Republican leader and I were working on a plan to avert insolvency. It was a fallback plan, a second choice for everyone including me. And certainly the Republican leader, I’m sure. But earlier this week it looked like we a needed to go to that fallback plan as soon as possible. It looked earlier this week like the Senate would have to originate the legislation perhaps as soon as today to avoid default. During the course of the week, circumstances have changed. 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. That’s very important to our country. The product on which they are working would address, I understand, both taxes and spending and under the Constitution, the House of Representatives must originate all revenue items. Therefore, the path to avert default now runs first to the House of Representatives. That’s what the Constitution demands. We in the Senate must wait for them. Therefore, the Senate does not need to originate legislation today. Earlier this week I had announced that the Senate will need to be in session this weekend. Based on these changed circumstances, it is no longer the case. So at the close of business today, the Senate will be out until Monday. Over the weekend, of course, there will be all kinds of meetings going on. I’ll do my best to monitor closely the talks between the President and the Speaker.
Reid said he would still consider moving the plan he and McConnell crafted if the House legislation falls apart. And to that end, both leaders will be attending a bipartisan Gang of Six meeting later Friday as they consider how to incorporate the Gang’s suggestions into their own bill. It is interesting to note that Reid makes a point of saying that the President’s deal would address both cuts and taxes. On Thursday, Reid was openly critical of a floated $3+ trillion plan by the President because, he said, it did not take a “balanced approach” and focused too heavily on spending.
Reid’s decision makes the House negotiations the only show in town to raise the debt ceiling. But the House will be out of session over the weekend. If and when there is a plan, the first chance to introduce it to members will be when they return Monday night. And so, for now, Washington’s debt talks have reverted back to the Obama and Boehner show. Let’s hope this bargaining process goes a little better than the last.