Senate Kills Tea Party-Backed Bill On Debt

WASHINGTON -- Senate Democrats shut down the draconian “Cut, Cap and Balance” bill Friday, declaring their action would clear the way to get to a real deal to raise the debt limit and cut the deficit.

The Tea Party-backed measure ultimately aimed to pass a balanced budget amendment to the U.S. Constitution that would cap federal spending at 18 percent of the gross domestic product -- a level that Democrats argued excludes paying for Medicare and Medicaid.

As such, Democrats called it one of the worst pieces of legislation they've ever seen and shut it down, tabling it by a partyline vote of 51 to 46, with three senators missing the vote.

"Cut, Cap and Balance is now over. It's done, dead," Senate Majority Leader Harry Reid said just after the vote.

Republicans argued that the measure was the only solution passed by the House that was on the table and that Democrats should be willing to debate and amend the legislation if they didn't like it.

But Democrats worried doing so would just be a way of running down the clock, leaving them with no other options before the country hits its borrowing limit on Aug. 2.

Reid (D-Nev.) was candid in explaining his reasoning for shutting down the GOP effort.

“It's interfering with the negotiations between the White House and the House of Representatives, and it is without merit, this legislation," Reid said before the vote.

He also suggested it would have political consequences for senators who back such deep cuts.

"We feel comfortable where we are on this issue, and I would suggest to my Republican friends they should look to where they are on this issue," Reid warned. "This is a very, very bad piece of legislation. Anyone voting for it, I think, will have to respond in many different ways to the people of their state."

The vote had originally been expected to come Saturday, but Reid pushed it forward to try and give more time for a deal that could actually pass.

A Democratic staffer familiar with negotiations said a plan offered by Senate Minority Leader Mitch McConnell (R-Ky.) remains the most likely resolution. It would be a temporary measure that gives the White House authority to hike the debt ceiling in three increments, while finding about $1.5 trillion in cuts.

But Republicans were refusing to go there, insisting that the Constitutional amendment had to be pursued.

Sources said the White House and House Speaker John Boehner (R-Ohio) were also still trying to get a bigger deficit and debt-cutting plan, and various reports said they were zeroing in on $3 trillion in cuts, with the possibility of $1 trillion in new revenues.

So many details appeared to remain unresolved, that it was unclear a deal was possible. Among reported speculation, Boehner was holding out for hard, enforceable cuts. The revenue would not be guaranteed, however, and Democrats insist revenue must be included. Reportedly, a trigger mechanism would be set to allow the Bush-era tax cuts for the wealthy to expire, while chunks of the health insurance law would be repealed -- including the mandate for individuals to buy insurance.

One source familiar with the negotiations suspected that effort would eventually fail and the McConnell plan would move, shifting the unpalatable responsibility for cutting and lifting the debt cap to President Obama.

"No one wants to punt until default is the only other option," the Democratic aide said.

But still, before the vote, House Republican leaders criticized Senate Democrats for not coming up with a debt proposal of their own.

The House “has done its job” by passing Cut, Cap and Balance, Boehner told reporters. "I hope that the Senate will do theirs."

"When is Harry Reid going to put forward his ideas?" House Majority Leader Eric Cantor (R-Va.) asked. "Harry Reid keeps saying that somehow the House won't work with him. Where are his ideas?"

After the vote, though, the ball is in Boehner's and the president's court, with the Senate out till Monday.

"I wish them well," Reid said.