House rejects debt limit increase without cuts

WASHINGTON (AP) - House Republicans dealt defeat to their own proposal for a $2.4 trillion increase in the nation's debt limit Tuesday, a political gambit designed to reinforce a demand for spending cuts to accompany any increase in government borrowing.

The vote was lopsided, with just 97 in favor of the measure and 318 against.

House Democrats accused the GOP of political demagoguery, while the Obama administration maneuvered to avoid taking sides - or giving offense to majority Republicans.

The debate was brief, occasionally impassioned and set a standard of sorts for public theater, particularly at a time when private negotiations continue among the administration and key lawmakers on the deficit cuts Republicans have demanded.

The bill "will and must fail," said Rep. Dave Camp, R-Mich., the House Ways and Means Committee chairman who noted he had helped write the very measure he was criticizing.

"I consider defeating an unconditional increase to be a success, because it sends a clear and critical message that the Congress has finally recognized we must immediately begin to rein in America's affection for deficit spending," he said.

But Rep. Sander Levin, D-Mich., accused Republicans of a "ploy so egregious that (they) have had to spend the last week pleading with Wall Street not to take it seriously and risk our economic recovery."

He and other Democrats added that Republicans were attempting to draw attention away from their controversial plan to turn Medicare into a program in which seniors purchase private insurance coverage.

The proceedings occurred roughly two months before the date Treasury Secretary Tim Geithner has said the debt limit must be raised. If no action is taken by Aug. 2, he has warned, the government could default on its obligations and risk turmoil that might plunge the nation into another recession or even an economic depression.

Republicans, who are scheduled to meet with Obama at the White House on Wednesday, signaled in advance that the debt limit vote did not portend a final refusal to grant an increase.

The roll call vote was held late in the day, and there was little, if any discernible impact on Wall Street, where major exchanges showed gains for the day. At the same time, it satisfied what GOP officials said was a desire among the rank and file to vote against unpopular legislation the leadership has said eventually must pass in some form.

Republicans said they were offering legislation Obama and more than 100 Democratic lawmakers had sought.

But Rep. Steny Hoyer of Maryland, the second-ranking Democrat, accused the GOP of staging a "demagogic vote" at a time lawmakers should work together to avoid a financial default.

All 97 votes in favor of the measure were cast by Democrats, totaling less than a majority and far under the two-thirds support needed for passage.

For its part, the administration appeared eager to avoid criticizing Republicans.

"It's fine, it's fine," presidential press secretary Jay Carney said when asked about the Republican decision to tie spending cuts with more borrowing.

"We believe they should not be linked because there is no alternative that's acceptable to raising the debt ceiling. But we're committed to reducing the deficit," Carney said.

The government has already reached the limit of its borrowing authority, $14.3 trillion, and the Treasury is using a series of extraordinary maneuvers to meet financial obligations.

By no longer would making investments in two big pension funds for federal workers and beginning to withdraw current investments, for example, the Treasury created $214 billion in additional borrowing headroom.

At the same time, the Obama administration and congressional leaders are at work trying to produce a deficit-reduction agreement in excess of $1 trillion to meet Republican demands for spending cuts.

Political maneuvering on legislation to raise the debt limit has become common in recent years, as federal deficits have soared and presidents of both political parties have been forced to seek authority to borrow additional trillions of dollars.

Because such legislation is unpopular with voters, presidents generally look to lawmakers from their own political party to provide the votes needed for passage. In the current case, though, Republicans control the House, and without at least some support from them, Obama's request for a debt-limit increase would fail.

However, House Speaker John Boehner, R-Ohio, announced months ago that he would demand spending cuts as a condition for passage.

"It's true that allowing America to default would be irresponsible," he said on May 9 in a speech to the Economic Club of New York. "But it would be more irresponsible to raise the debt limit without simultaneously taking dramatic steps to reduce spending and to reform the budget process."

He added that any spending cuts should be larger than the increase in borrowing authority, a statement meant to lay down a marker for the deficit-reduction talks led by Vice President Joe Biden.

Few details have emerged from those negotiations, although Biden said recently the negotiators had made progress. He expressed confidence they would be able to agree on specific cuts in excess of $1 trillion over the next decade, and then look to procedural mechanisms known as "triggers" to force further automatic deficit cuts adding up to another $3 trillion or so.

House Majority Leader Eric Cantor, a participant in the talks, said afterward, "I am confident that we can achieve over a trillion dollars in savings at this point, and hopefully more."

Earlier, Sen. Jon Kyl, R-Ariz., had said the discussions centered on deficit cuts totaling in the range of $150 billion to $200 billion over a decade, but that was from a relatively small category of programs.

Among the areas eyed for spending cuts is the federal pension program, where the White House has signaled it is receptive to a Republican proposal for employees to make greater contributions.

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Associated Press writers Andrew Taylor and Martin Crutsinger contributed to this report.