Senate Democratic Leader Harry Reid said he plans to move ahead with a debt-limit bill to rival a House Republican proposal that got new life Friday, as President Obama said it's time to move forward with debt-reduction legislation that can be supported by both political parties.
With the U.S. moving perilously closer to default on its loans to cover years of deficit spending, the majority leader announced his plan to cut $2.5 trillion from the deficit over a decade. At the same time, House Speaker John Boehner announced he would include a balanced budget amendment in his proposal, which appeared to earn him the support he needed from recalcitrant Republicans.
Reid said he has invited his counterpart, Senate Republican leader Mitch McConnell, to negotiate with him after House Republican leaders were unable to secure votes to pass the debt-reduction bill regrouped.
"I know the Senate compromise bill Democrats have offered is not perfect in Republican' eyes. Nor is it perfect for Democrats," Reid said. "But together, we must make it work for all of us. It is the only option."
McConnell, however, chastised Senate Democrats for sitting on their hands while the House GOP did all the heavy lifting.
"The contrast couldn't be starker. Rather than working the last few days towards a solution to this crisis the way the Republican majority in the House has, the Democratic majority here in the Senate has been wasting precious time rounding up 'no' votes to keep this crisis alive," McConnell said on the Senate floor.
"Rather than being responsible and doing their duty and come up with a bill that can actually pass, they have been busy signing people up for the "Not Good Enough Caucus" and ginning up opposition to everything else," he added.
Obama said Reid has introduced cuts that can be supported by Republicans and Democrats, adding that he needs a plan he can sign by Tuesday, the deadline imposed by the administration as the drop-dead date for avoiding default.
"We are almost out of time. We need to reach a compromise by Tuesday so the country can afford to pay its bills on time, as it always have. ... Keep in mind if we don't do that, if we don't come to an agreement, we could lose our credit rating, " Obama said in the latest of several addresses to the nation, including a prime-time address at the beginning of the week.
"It's clear now that any solution to avoid default must have the support of both parties," he added, noting that if the nation's credit rating were downgraded it would be because "we didn't have a triple-A political system to match our triple-A credit rating."
Boehner, R-Ohio, suffered a stinging setback Thursday when, for a second consecutive day, he had to postpone a vote on his proposal to extend the nation's borrowing authority for six months while cutting federal spending by nearly $1 trillion.
Boehner's new provision for a balanced budget amendment would appear to have been the sweetener needed to win over as many as two-dozen holdout Republicans who want greater cuts in federal spending before agreeing to hike the $14.3 trillion debt ceiling.
Prior to Boehner's announcement, Rep. Trey Gowdy, R-S.C., said he was a "no" on Boehner bill until something is added that is "trans-election cycle, trans-systemic, and transformative." That would include something like a balanced budget amendment. he said, noting if that promise were included, then he "would embrace it."
While such a move could motivate Republicans, it would not get any traction in the Senate, which wants a longer-term agreement that would raise the limit to pay for deficit spending through 2012.
On the opposite side of the Capitol, Reid passed on warnings by Treasury Secretary Tim Geithner that the prospects of default are growing.
The international community is very worried, Reid said Geithner told him, adding that the ability to get loans will become more difficult. Credit ratings agencies have also warned that unless Congress gets on a serious path to debt reduction, it could reduce the country's stellar AAA rating.
A vote on a Reid proposal could take place in the Senate on Sunday.