A U.S. House of Representatives vote on Speaker John Boehner's two-step plan to raise the U.S. debt ceiling was postponed amid growing Republican opposition to the measure that the Obama administration has threatened to veto.
The plan, which would cut $3 trillion U.S. in government spending, was faced with new questions about its impact. House Rules Committee Chairman David Dreier, a California Republican, said he adjourned his panel tonight "to ensure the product we have is in full compliance with the pledge to cut spending more than the increase in borrowing authority."
The latest development cast new doubt on whether lawmakers and Obama could agree on a plan raising the nation's debt limit before an Aug. 2 deadline when the U.S. could default on some of its obligations. The House vote had been scheduled for tomorrow and was called off late today.
President Barack Obama's Office of Management and Budget said it "strongly opposes" the measure and would recommend a veto if it were passed by Congress.
The Congressional Budget Office earlier today estimated that it would save less than advertised. Boehner's plan is intended to make $1.2 trillion U.S. in spending cuts in a first phase and up to $1.8 trillion U.S. in a second step, with those cuts to be proposed by a special congressional committee. CBO said today the first phase would save about $850 billion U.S. and couldn't score the second.
Boehner, facing opposition within his own party, is trying to round up votes to pass the measure in the Republican-run House with one week left to avert a potential default. The plan could lead to another debt-limit standoff next year.
Senate Majority Leader Harry Reid, a Democrat, is seeking support for an alternative $2.7-trillion U.S. plan providing the debt-limit increase that Obama seeks to get through the 2012 elections. The Obama administration voiced confidence that lawmakers will reach an agreement in the remaining days.
Treasuries remained higher as speculation that lawmakers will agree to raise the debt limit in time to avoid a default boosted investor demand at today's auction of $35 billion U.S. in two-year notes.
White House Chief of Staff William Daley, a former JPMorgan Chase & Co. executive, said on Bloomberg Television that a rise in U.S. Treasuries is a "good sign" that markets aren't overreacting to the political impasse over raising the federal debt ceiling.
Daley also said Boehner's plan won't pass Congress and he expects Reid will win enough support to get Senate passage of his proposal. Obama won't seek to use his executive authority to unilaterally the raise debt ceiling, Daley said.
Boehner, an Ohio Republican, said today his plan can pass both chambers of Congress.
"We are going to have some work to do to get it passed, but I think we can," Boehner told reporters after a meeting of House Republicans. The House plans to vote in two days on a constitutional amendment to require a balanced federal budget.
