US Republican leaders scrambled on Friday to rescue their budget deficit-cutting plan after conservatives mounted a rebellion that heaped uncertainty on efforts to avert a catastrophic debt default.
House of Representatives Speaker John Boehner’s failure to round up enough support for his plan on Thursday exposed a rift in the Republican Party that is hampering efforts to reach a compromise to raise the U.S. debt ceiling before a deadline on Tuesday.
One House member who had resisted Boehner’s entreaties said early on Friday that there has been progress on the measure and predicted it would pass later in the day. “I think we made progress last night,” Representative Trey Gowdy, a Tea Party movement-backed first term congressman, told CNN. “What we’ll do today, and I predict it will be done today, is for the third time send a plan that raises the debt ceiling in a responsible way.”
President Barack Obama says that unless Democrats and Republicans strike a deal, the government will start running out of money to pay all its bills on Aug. 2, a once unthinkable prospect that is increasingly unnerving investors.
With only four full days left, the Treasury could unveil an emergency plan as early as on Friday explaining how the govt would function and pay its obligations if Congress does not agree to raise its borrowing limit beyond $14.3 trillion. Despite warnings of dire economic consequences, lawmakers were in a standoff as conservative Republicans demand an end to what they say is out-of-control government spending and Democrats seek to protect spending on social programs.
