The U.S. Congress remained dangerously split on Wednesday in the face of an unprecedented American default on its debt in just six days, as Republicans clashed with Democrats, and with each other, over raising the federal cap on borrowing.
World stock markets watched nervously for a feared downgrade of the United States triple-A bond rating, shedding value across the board.
The political and fiscal turmoil embroiling Washington, brought on by the striking ascension of a block of newly elected members of the House who are beholden to the low-tax, small-government tea party wing of the Republican party, threatens to show the U.S. economy back into recession or worse if Congress can’t agree on the normally routine issue of raising the American debt limit by Tuesday.
So far all efforts at compromise among the Republican-controlled House, the Democratic-run Senate and President Barack Obama have failed, raising the level of partisan acrimony.
House Speaker John Boehner, a Republican, was forced late Tuesday to postpone a floor vote on his plan that originally had been scheduled for Wednesday after nonpartisan congressional budget office said the proposal would cut spending less than advertised. He promised to rewrite the measure, but that will delay any vote until at least Thursday.
Mr. Boehner is struggling, unsuccessfully so far, to mend the rift between more mainstream House Republicans and the tea party block that is demanding deeper spending cuts to accompany a short-term, nearly $1 trillion increase in the government’s borrowing cap. Many of the increasingly powerful tea party group said they would not support their speaker’s position.
“We need more drastic cuts,” said Republican Rep. Jason Chaffetz. “I can’t support it in its current form.”
Unless he can wrestle the situation under control, Mr. Boehner risks losing leverage in his dealing with President Barack Obama and Democrats controlling the Senate.
Without an infusion of borrowed money, the government faces an unprecedented default on U.S. loans and obligations like $23 billion worth of Social Security pension payments to retirees due on Aug. 3. Congressional telephones and Email servers were jammed after Mr. Obama urged the public to contact their representatives in his Monday night address to the nation.
