Senate Votes to Set Aside 'Cut, Cap and Balance' Plan Proposed by House GOP

Published July 22, 2011

| FoxNews.com

The Senate on Friday voted to "table," or kill, a House Republican proposal to "cut, cap and balance" the budget that Majority Leader Harry Reid called the single worst piece of legislation ever to hit the Senate floor.

The House Republican "Cut, Cap and Balance" (measure) is now over. It's done, dead," Reid said after the 51-46 vote.

With its defeat, lawmakers are still looking for a deal to cut federal spending while raising the nation's $14.3 trillion debt ceiling. The Obama administration says the limit must be increased by Aug. 2 or the country could default on its loans or otherwise be forced to shut down services.

The Democratic criticism of the plan, which would require a Balanced Budget Amendment to be voted on after cutting federal spending and capping the amount Congress could increase future expenses without corresponding cuts, infuriated GOP members who say it is exactly what President Obama asked for in a debt deal.

"The Democrat-led Senate's failure to both produce a budget and pass the Cut, Cap, and Balance Act of 2011 underscores the Democrats' irresponsible commitment to the status quo," Sen. John Cornyn, R-Texas, said in a statement after voting for the bill. "While the president and Senator Reid refuse to produce a plan to deal with our debt crisis, Republicans will keep working to meet the nation’s fiscal challenges."

"Senate Democrats have defied the will of the American people who overwhelmingly support real spending cuts, caps on future spending, and a balanced budget to create a better environment for private-sector job growth," House Speaker John Boehner said. 

"Republicans are standing with the American people and, as I’ve said before, will not pass a bill that fails to cut spending by more than it increases the debt limit, restrain future spending, or that raises taxes on families and job creators," Boehner, R-Ohio, continued.

About 50 House Republican freshman associated with the Tea Party movement attended the Senate vote. They were among the drivers of the legislation in the House.

With Friday's vote over, senators quickly moved to vacate the floor. Cars were waiting outside to whisk members to airports to take flights home. Though the Senate was originally scheduled to be in session, Reid, D-Nev., noted that would not be the case and no votes would be taken before Monday afternoon.

Reid said that the session wasn't necessary because Obama and Boehner were working on a compromise measure. He said he understands the plan addresses both taxes and revenue, and therefore must originate in the House, giving the Senate no reason to work.

That deal -- built off the plan from a month ago to reduce U.S. spending by $4 trillion over 10 or 12 years --- was said to include $3 trillion in spending cuts with promises of tax reform in the next year. 

The White House and speaker have vociferously denied that a deal was done. But Boehner, speaking to reporters before the Senate vote, expressed his dedication to continue, calling himself "a happy warrior" even though he denied that an agreement was at hand.

"There was no agreement, publicly, privately or nowhere," he said, adding, "It's going to be a hot weekend here in Washington, D.C."

 

Another person hot about the talks was Sen. Dianne Feinstein, D-Calif.. Speaking Friday before the Senate vote, Feinstein expressed her anger about not knowing the numbers of a deal. Feinstein, who rarely loses her cool, said she lost it on Office of Management and Budget Director Jack Lew on Thursday, because Lew would not say whether there was a deal at hand, even though the newspapers were reporting progress.

Feinstein said she would "venture a guess" that about 20 million people in her state benefit from Social Security, Medicare, Medicaid and veterans benefits, and they need to know what the coming cuts are.

"I represent a huge state where huge numbers of people are dependent on us," she said. "We always knew what was going on (with Presidents Bush and Clinton). None of that (information) is available to us now, and that's not good. ... It doesn't help you build a team."

Sources close to the budget talks in Washington told Fox Business Network that the emerging Obama-Boehner deal will likely incorporate a major gimmick to count more than $1 trillion in budget savings over the next decade -- winding down the wars in Afghanistan and Iraq. The wars were being wound down anyway, but by assuming the costs of the wars continue at current levels for a decade, Obama and Boehner can claim $1 trillion in savings. The headline number would also add hundreds of billions in interest savings on the so-called war savings. 

Further, the deal could allow modest changes in entitlements, such as replacing the inflation measure used in Social Security, but would otherwise extract little in savings over the next 10 years from the real drivers of the long term fiscal crisis, Medicare, Medicaid and Social Security.

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