* Latest Republican demand on debt limit collapses as
* Boehner: Borrowing increase must rely largely on
* Lack of unity hampers Republican strategy on fiscal issues
* Ted Cruz to insist on 60-vote Senate threshold for passage
By David Lawder and Richard Cowan
WASHINGTON, Feb 11 The U.S. House of
Representatives narrowly approved a one-year extension of
federal borrowing authority on Tuesday after Republicans caved
into President Barack Obama's demands to allow a debt limit
increase without any conditions.
The 221-201 vote, carried mainly by Democrats, marked a
dramatic shift from the confrontational fiscal tactics House
Republicans have used over the past three years, culminating in
last October's 16-day government shutdown.
It came after House Republicans repudiated House Speaker
John Boehner's latest plan to link an increase in the $17.2
trillion borrowing cap to a repeal of planned cuts to military
Although Boehner called his decision to advance a "clean"
debt limit a "disappointing moment," it sets aside a difficult
and divisive issue until after the 2014 congressional elections
in November, allowing Republicans to focus their campaign
efforts on the rocky launch of Obama's healthcare reform law.
The White House hailed the House vote as "a positive step in
moving away from the political brinkmanship that's a needless
drag on our economy."
Democrats provided most of the "yes" votes on the debt limit
increase, which was hastily attached to a measure renaming an
air traffic control center in Nashua, New Hampshire. There were
193 Democrats who voted yes, versus just 28 Republicans, who
wanted to pin blame on Obama's refusal to negotiate.
"He will not engage in our long-term spending problem,"
Boehner told reporters earlier on Tuesday. "So let his party
give him the debt ceiling increase that he wants."
The Democratic-controlled Senate was likely to begin
consideration of the measure on Wednesday. But Republican
Senator Ted Cruz, a conservative Tea Party favorite, said on
Tuesday night he would insist on a 60-vote threshold for the
debt ceiling measure to pass the Senate. That would mean at
least five Republicans would need to join the Democrats, who
control 55 votes, for the measure to pass the chamber.
Senate Republican Whip John Cornyn said earlier on Tuesday
there were "probably not" five Republican votes in the Senate
for a clean debt ceiling increase. But Senator Dick Durbin, the
second-ranking Democrat in the chamber, voiced optimism there
would be 60 yes votes if needed.
Senate passage this week would buy financial markets
considerable breathing room before Feb. 27, when the U.S.
Treasury expects to exhaust existing borrowing capacity, putting
federal payments at risk.
Without an increase in the statutory debt limit, the U.S.
government would soon default on some of its obligations and
have to shut down some programs, a historic move that would
likely cause market turmoil.
U.S. stocks reacted mildly to news of the House Republican
decision to drop any conditions on the debt limit. Wall Street
stocks rose for a fourth session as traders focused most of
their attention on Federal Reserve Chair Janet Yellen's first
"It was a minor worry that an agreement wouldn't come. It's
not a big plus (for the market), but I'm glad this happened,"
said John Manley, chief equity strategist at Wells Fargo Funds
Management in New York.
As stocks rose, bond prices retreated.
Republicans used the debt limit with great effectiveness in
2011 to gain budget concessions, when a bitter standoff led to a
deal calling for $2.1 trillion in cuts to U.S. discretionary
spending over a decade. The fight also cost the United States
its top-tier credit rating from Standard & Poor's.
But the wrenching two-week government shutdown and debt
limit battle last October sapped the party's enthusiasm for
another major showdown.
Instead of seeking big cuts to the Social Security and
Medicare benefit programs that Republicans blame for pushing up
U.S. debt, Boehner floated more modest proposed concessions,
such as ordering approval of the Canada-to-Texas Keystone XL oil
pipeline and changes to Obamacare insurance provisions.
But they too failed to gain enough Republican support to
overcome objections from Democrats.
The final plan to repeal cost-of-living cuts for
non-disabled military retirees was doomed from the start,
lawmakers said, as many conservatives objected to linking
veterans to the debt ceiling, to cost offsets and other issues.
Many simply wanted the big deficit reduction achieved in the
"If there's something attached to the debt ceiling, it
should be addressing the underlying problem, which is, we're
spending too much money," said Representative Jim Jordan, a
conservative Republican from Ohio.
The episode showed Boehner still has difficulty exerting
control over his fractious caucus, in which conservatives backed
by the Tea Party movement hold considerable sway.
"Republicans can't unite behind one plan. And so as long as
we do that, we'll not be influencing the outcomes of issues like
this," said Republican Representative Kevin Brady of Texas.
Conservative groups that egged on Republicans in the October
shutdown fight over Obamacare funding urged members to vote
against the debt limit increase.
Some Republicans wanted the debt limit issue behind them so
they can focus on more productive issues such as next year's
annual spending bills and bashing Obama's healthcare law, which
they have repeatedly tried to repeal.
Republican House leaders led off a news conference on
Tuesday with five lawmakers complaining about the latest
Obamacare mandate delay for medium-sized companies.
In a somewhat cryptic sign that Boehner himself may be
relieved to put the debt limit behind him, he walked out of the
news conference singing the opening words to "Zip-a-Dee
Doo-Dah," the marquee song from the 1946 Disney film "Song of