House rejects debt limit hike in protest vote
WASHINGTON (Reuters) - The House of Representatives rejected a $1.2 trillion increase in the federal debt limit on Wednesday in a largely symbolic vote that allowed Republicans to stake out election-year positions to bash President Barack Obama's spending record.
The Republican-controlled House voted 239 to 176 along party lines in favor of a "resolution of disapproval" against the increase sought by Obama, a Democrat, but the winning tally fell far short of the two-thirds majority needed to override a presidential veto.
The effort to block the debt limit increase is expected to die in the Democrat-controlled Senate, which reconvenes in Washington next week.
The vote was largely an academic exercise as Congress gave Obama the authority to increase the debt limit last August as part of a deal to end a rancorous budget battle that brought the United States to the brink of default and cost it its coveted top-tier credit rating from Standard & Poor's rating agency.
Under that deal, Congress granted Obama a $2.1 trillion increase in several steps: $400 billion immediately, followed by a $500 billion hike and a final $1.2 trillion hike subject to Wednesday's protest vote.
Republicans voted overwhelmingly in favor of the disapproval resolution, by 233 to 1. In contrast, 174 House Republicans, including many fiscally conservative Tea Party-aligned lawmakers, voted in favor of last year's budget deal that included the hike.
Republican lawmakers used Wednesday's vote to go on record as opposing more big spending increases and to cast Obama as the architect of a massive spending binge. Exploiting voter worries over the ballooning federal debt, now around $15 trillion, is a central theme of Republicans' election campaign.
In Obama's three years in office, the government has run up record trillion plus deficits.
The White House argues that Obama inherited a deficit on track to exceed $1 trillion, and was forced to spend hundreds of billions of dollars to stimulate the economy to prevent the worst recession since the 1930s becoming another Great Depression.
SPENDING MORAL HIGH GROUND
"Our nation's credit card is maxed out because of his administration's reckless spending," said Randy Hultgren, a Republican freshman congressman from Illinois who has support from the Tea Party movement.
"Today's vote will not just show which of our colleagues support more spending, it will also reflect our positions on the greater philosophical divide confronting us -- are we for bigger government or smaller, more effective government?" said Hultgren, part of a wave of Republicans swept into office in 2010 by pledging to slash federal spending.
Democrats countered that Republicans were playing political games that could send financial markets the wrong signal: America might not make good on its debts.
"At a time when S&P has moved to downgrade nine European countries' ratings, the last thing our nation can afford is a risk of default," said Jared Polis, a Democrat from Colorado.
The increase would push the U.S. debt ceiling to $16.394 trillion. The U.S. Treasury essentially reached the previous limit at the end of December, but has been using special accounting maneuvers to delay the increase to allow for the vote. On Tuesday, for instance, Treasury started dipping into a federal pension fund so it could continue selling debt securities, and it has also accessed the Exchange Stabilization Fund.
Obama is expected next month to try to use his budget plan to turn the tables on Republicans and cast himself as working against an obstructionist Congress to tackle deficits by reviving his proposals to slash deficits by $4 trillion.
Those plans, which were stopped in their tracks when deficit reduction talks collapsed last year, relied partly on tax hikes for the wealthy, an idea that Republicans have staunchly opposed.
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