Lawmakers’ votes open way for final US debt push

WASHINGTON, (Reuters) – U.S. lawmakers opened the  way yesterday for a last-ditch bid for a possible bipartisan  compromise to avert a crippling national default just four days  before the deadline to raise the country’s debt ceiling.

Harry Reid

The Republican-controlled House of Representatives approved a Republican deficit-cutting plan and the Democratic-led Senate  quickly rejected it — moves that underscored the ideological divide but also cleared a path to start negotiating a deal.

The back-to-back votes broke weeks of political inertia in  efforts to lift the $14.3 trillion U.S. debt limit by Tuesday after which the world’s largest economy will be unable to pay all of its bills, the government says.

Delays and procedural hurdles will still make it all but  impossible for Congress to strike a deal and send it to Obama’s  desk until the 11th hour, injecting a dangerous level of uncertainty into already rattled global financial markets.

Even if a late deal can be struck, the United States risks  losing its top-notch AAA credit rating.

Progress toward an agreement did not appear imminent. Democratic aides said Republicans had not yet given them suggestions on how to craft something that could win support  from both parties, suggesting that parliamentary maneuvering  and finger-pointing would continue.

With time running short, the House pushed a Republi-can deficit-cutting plan through by a vote of 218-to-210 after the  party’s leaders reworked the bill to appease anti-tax  conservatives in their ranks.

The legislation, denounced earlier by President Barack  Obama who had admonished lawmakers to stop wasting time and  find a way “out of this mess,” was always doomed to defeat in the Senate where all of Obama’s Democrats had vowed to vote  against it.

The Senate defeated the measure, 59-to-41, and Senate  Majority Leader Harry Reid, a Democrat, was expected to move  forward with a different approach that aims to get enough votes  from both parties to pass Congress by Tuesday.

Both sides have been at impasse for weeks with lawmakers locked in a blame game that has brought the country to the  brink of an unprecedented default, which could plunge America  back into recession and trigger economic turmoil globally.

World leaders have been stunned by the dysfunction in  Washington. World Bank President Robert Zoellick on Friday said  the United States was playing with fire.

America’s largest foreign creditor, China, has repeatedly  urged Washington to protect its dollar investments and its  state-run news agency on Friday said the United States had been  “kidnapped” by “dangerously irresponsible” politics.