US & Canada

US House and Senate divided over debt ceiling issue

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Media captionJohn Boehner: ''I stuck my neck out a mile to get an agreement with the president"

The US Congress has split along party lines as it seeks a solution to an ongoing deadlock over raising the nation's debt limit.

The House of Representatives passed a Republican bill proposed by Speaker John Boehner, but that was quickly killed by the Democratic-led Senate.

Senate leader Harry Reid is now seeking a vote on a rival plan he proposed.

The US risks defaulting on its financial obligations if a federal budget deal is not struck by 2 August.

Continued disagreements

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Media captionHarry Reid: ''It's time to come to together and compromise''

The Boehner plan includes some $900bn of spending cuts and would raise the debt ceiling by a similar amount.

However it would require another vote during mid-2012 and includes language in support of a so-called "balanced budget amendment" to the US constitution - both rejected by the White House and the Senate leadership.

The House vote was delayed from Thursday after Mr Boehner struggled to win over a number of staunchly conservative Republicans, including newly elected representatives who back the Tea Party.

The plan eventually passed the House by 218-210, with 22 Republicans and every Democrat voting against.

Before the vote, Mr Boehner said the plan advanced the "great cause" of a balanced budget amendment.

Mr Boehner appeared heated in front of his colleagues in the House, slamming his fist on a podium on Friday evening and calling for lawmakers to pass his proposal.

Mr Boehner said Republicans had tried their "level best" to reach a deal.

"I stuck my neck out a mile to get an agreement with the president of the United States," Mr Boehner said, referring to negotiations with President Barack Obama that twice broke down.

"My colleagues, I can tell you I have worked with the president and the administration since the beginning of this year to avoid being in this spot," he added.

"A lot of people in this town can never say yes," Mr Boehner said.

Shortly after the House passed its bill, the Democratic-led Senate voted to reject the Boehner plan in a late-evening vote on Friday.

Senate Majority Leader Harry Reid accused the Republicans of seeking to filibuster, or delay, proceedings by forcing a vote on his rival plan to achieve a 60-vote "supermajority" before passing.

Speaking after the Senate adjourned for the night, he accused his Republican counterpart of not being willing to negotiate.

"Unless there is a compromise, or they accept my bill, we're heading for economic disaster," he said.

The US government will start running out of money to pay all its bills unless a $14.3tn (£8.79tn) borrowing limit is increased by Tuesday.

Democrats say the Republican bill as passed would cause immeasurable damage to the economy because it would force Congress to vote on another extension of the debt ceiling early in 2012, a time when presidential election campaigns will be in full swing.

'Out of time'

The White House quickly responded to the passage of Mr Boehner's bill, calling for a "compromise that avoids default and lays the basis for balanced deficit reduction".

Earlier, the White House said Mr Boehner was taking a dangerous approach with his proposal.

"Amend the constitution or default is a highly dangerous game to play," White House spokesman Jay Carney said.

Meanwhile, Mr Obama accused House Republicans of pursuing a partisan bill that would force Washington into another debt limit fight within months.

"There are plenty of ways out of this mess, but we are almost out of time," Mr Obama said.

"The time for putting party first is over," he added. "The time for compromise on behalf of the American people is now."

Analysts predict a last-minute scramble for a compromise and razor-edge votes in both chambers, with the high-stakes game of legislative brinkmanship expected to continue all weekend.

The president backs Mr Reid's proposal, which would cut $2.2tn from deficits and raise the debt ceiling by $2.7tn.

The Boehner and Reid plans overlap in key ways, such as trimming spending over 10 years and shunning President Obama's call for tax increases on the wealthy and corporations.

Analysts have said international markets would be shaken if the US defaults and runs out of money to pay its bills.

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