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Senate Kills House GOP Deficit Plan

Senate Kills House GOP Deficit Plan

WASHINGTON — The Senate Friday killed the House Republican “cut, cap and balance” bill, and Majority Leader Harry Reid called off a weekend session.

The party-line Senate vote was 51-46, The Hill reported.

The Republican-led House passed the measure, which would have cut spending by $111 billion in 2012, capped spending over the next decade and barred more borrowing until Congress passes a balanced-budget amendment to the Constitution, by 234-190 Tuesday.

Senate rejection was expected, and President Barack Obama had promised a veto, but the vote was seen as necessary before reaching a larger deal to raise the $14.3 trillion national debt ceiling by Aug. 2.

Reid, D-Nev., then told senators to take the weekend off.

“It looked earlier this week like the Senate would have to originate legislation perhaps as soon as today to avoid default,” he said. “Circumstances have changed. The Speaker of the House and the President have been working to reach agreement.”

Obama’s proposed deal with Speaker John Boehner, R-Ohio, envisions $1.5 trillion to $3 trillion in U.S. spending cuts but few tax changes for two years, officials said.

News of the proposed deal angered Reid, who confronted White House budget director Jack Lew during a meeting about secret talks with Boehner, The Hill reported earlier Friday.

“I’m the Senate majority leader — why don’t I know about this deal?” Reid demanded Thursday as Lew walked into the Mansfield Room for a meeting with Senate Democrats, a lawmaker who witnessed the exchange said.

Lew replied, “If there’s a deal, then the president doesn’t know about it, the vice president doesn’t know about it and I don’t know about it.”

Boehner, at a news conference Friday before the Senate vote, also said there was no agreement.

“So the House has done its job and I hope that the Senate will do theirs. And if they don’t like our version of cut, cap and balance, guess what? That’s what the legislative process is for,” he said.

“They can amend it. They can change it. They can send it back over to the House. And, frankly, they ought to take action on that bill.”

Democrats were angry Obama was apparently willing to accept big spending cuts in exchange for reforming the tax code at some time in the future as part of a proposal to raise the $14.3 trillion debt ceiling.

The Democratic President and Republican House Speaker are coming together on a plan to make sharp cuts in Federal agency spending, including at the Pentagon — perhaps around $1.5 trillion in 10 years. But it would postpone tax-overhaul legislation and cuts to so-called entitlement programs until next year, an election year, pushing back the end to most special tax exemptions, tax deductions and tax credits until at least 2013, the officials told The Washington Post and The Wall Street Journal.

The tax-code overhaul would lower personal and corporate income-tax rates while eliminating or reducing an array of popular tax breaks, such as the deduction for home mortgage interest, the officials said.

One thing Obama said he would not do is use the 14th Amendment to raise the debt ceiling on his own, as former President Bill Clinton and others have urged him to do, using the section saying Congress must honor the Federal debt.

The president told a crowd at a “town hall” in Maryland Friday, “I have talked to my lawyers” about the section. “They’re not persuaded that that is a winning argument.”

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