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Debt Limit Goes Down

House Republicans made a show of voting down a standalone debt limit increase Tuesday, but the failure of the measure will have no effect on ongoing bipartisan negotiations led by Vice President Joseph Biden.

In fact, Republicans and Democrats are no closer to a deal on the amount of spending cuts they insist should be coupled with an increased debt ceiling. Treasury Secretary Timothy Geithner has estimated the debt limit must be raised by Aug. 2 to avoid a default on the government’s obligations.

The measure to raise the debt limit by more than $2 trillion failed 97-318, with only Democrats supporting it.

The vote instead served a more political purpose, with Republicans hammering Democrats for being unwilling to make significant spending cuts, while Democrats argued the vote was a sham because it was set up to fail.

Still, House Republicans said the vote was important because it sends a clear signal to President Barack Obama that there is no appetite in Congress to move forward without significant spending cuts. The timing of the vote appeared to be calculated to occur just before today’s House Republican Conference meeting with Obama — the first time the president has met with all the House GOP Members since the midterm election.

Majority Leader Eric Cantor’s (R-Va.) spokeswoman Laena Fallon said her boss put the measure on the floor at the Democrats’ behest.

“Tonight’s vote comes at the demand of Secretary Geithner and 110+ House Democrats who want us to blindly raise the debt limit without cutting spending and continuing to max out the credit card,” Fallon said Tuesday in an email.

For Republicans, the vote also serves the purpose of demonstrating their tea party bona fides.

GOP leaders had toyed with the idea of moving ahead with a clean debt limit vote a few weeks ago, but they pushed it off as bipartisan talks continued. The leaders, who were also concerned the vote would disrupt financial markets, worked with Wall Street executives to ensure the impact of a political vote would not cause economic turmoil. Cantor went so far as to schedule the vote Tuesday evening after markets had closed.

Leaders were reticent to create a situation similar to the September 2008 vote during which the House first defeated the $700 billion Wall Street bailout, which triggered the largest one-day decrease in stock prices.

One GOP leadership aide predicted the measure would not have any Republican support because it didn’t include significant spending cuts and reforms.

The bill also was rejected by Democrats, but for different reasons.

House Democrats moved aggressively to characterize the vote as a political ploy.

“If the Republicans were prepared to work on a bipartisan basis on this issue, which is the only way we really do very tough things that are controversial, then I would be prepared to urge at least half my Members to support the extension of the debt limit, including myself,” Minority Whip Steny Hoyer said Monday during his weekly session with reporters. The Maryland Democrat said he would advise lawmakers to “not play this political charade.”

Rep. Peter Welch (D-Vt.), an outspoken advocate for passing a clean debt limit bill, also blasted Republicans for what he described as a “transparently political ploy” because the measure had no chance of passing.

“This has nothing to do with solving a very serious substantive problem,” Welch said. “It has everything to do with political positioning.”

Welch rallied more than 110 House Democrats in late April to sign a letter supporting a vote on the debt limit alone. Still, Welch said that while he would vote for a clean debt limit to pass, he was not urging others to do the same.

“Frankly, anyone who asks me, I say, I think, the obvious, ‘This is a political bill and not the opportunity that we need and must eventually have to vote on legislation to pay our bills,'” Welch said.

So far, little detail has emerged on how the lawmakers and Obama will come to a final agreement. However, negotiators have said they will exceed $1 trillion in cuts, including reductions for farm subsidies and requiring non-military federal workers to increase their contributions to pensions.

One major sticking point is how to handle entitlements. House Budget Chairman Paul Ryan (R-Wis.) earlier this year produced a budget with significant changes to Medicare, and Republicans have demanded it be used for the basis of the agreement. Democrats, however, have called the plan a nonstarter and have used it in an aggressive public-relations campaign against Republicans for the last several weeks.

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