Obama calls for compromise while Senate Republicans reject Reid's debt plan

One wonders if the U.S. default is inevitable as the same messages are repeated and blockages are strengthened.

On Saturday, President Obama repeated his call for House Republicans to accept a compromise that would allow the federal government to avoid a looming default on its debt obligations. But there was no sign of progress after the Senate quickly rejected Speaker Boehner's plan that had passed the House hours earlier, the New York Times reported today.

Senate Majority Leader Harry Reid scheduled a vote for early Sunday morning to break the stalemate, but House Republicans said they planned to hold a "symbolic" vote on Saturday afternoon to reject the Senate plan pre-emptively, the Times reported.

President Obama warned that the federal government could run out of money if Congress fails to resolve the crisis by the Tuesday deadline. "Democrats in Congress and some Senate Republicans have been listening and have shown themselves willing to make compromises to solve the crisis," he said. "Now all of us — including Republicans in the House of Representatives — need to demonstrate the same kind of responsibility."

But this afternoon Senate Republicans said they will block Majority Leader Reid’s debt-limit plan this weekend, Bloomberg reported.

“It will be defeated,” a spokesman for Republican Senator Mitch McConnell said today in Washington. He said Reid’s measure likely won’t be the route for a final agreement. Any deal would probably start with action in the House and then the Senate would begin its work, he said.

Congressional leaders “need to start working together immediately to reach a compromise that avoids default and lays the basis for balanced deficit reduction,” White House Press Secretary Jay Carney said in a statement after the two votes.

Reid, a Nevada Democrat, who offered modifications to a Democratic plan that he said are designed to attract Republican support, accused Republican leaders of rejecting his efforts to negotiate a compromise. Reid said when he attempted to engage McConnell in talks, “we had no one to negotiate with.”

Financial markets were restrained in reacting to the Washington impasse yesterday, Bloomberg reported. Stocks fell as economic growth trailed forecasts. The Standard & Poor’s 500 Index slipped 0.7 percent and tumbled 3.9 percent this week for its worst slide in a year.

The Treasury Department has said the U.S. will pass its borrowing limit and run out of options for avoiding default if the $14.3 trillion debt ceiling isn’t raised by Aug. 2.