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U.S. Senate kills House debt ceiling plan
July-30-2011

Senate Majority Leader Harry Reid (D-NV) speaks during a joint news conference with Sen. Charles Schumer (D-NY)(L) and Senate Majority Whip Dick Durbin (D-IL) (R) on the Republican Filibuster of Reid's debt plan on Capitol Hill in Washington July 29, 2011. [Xinhua/Reuters Photo]
Senate Majority Leader Harry Reid (D-NV) speaks during a joint news conference with Sen. Charles Schumer (D-NY)(L) and Senate Majority Whip Dick Durbin (D-IL) (R) on the Republican Filibuster of Reid's debt plan on Capitol Hill in Washington July 29, 2011. [Xinhua/Reuters Photo]

The U.S. Senate voted Friday to kill a debt ceiling plan put forth by House Speaker John Boehner to avoid a looming debt default crisis less than two hours after the House passed the bill.

The measure was defeated in a 59-41 vote Friday night. The majority of the Senate members believed that the two-step House plan would harm the U.S. fragile economic recovery as it will require another painful debt-limit debate early next year.

Under the House plan outlined by Boehner, a Republican, Congress would immediately raise the federal government's borrowing capacity by 900 billion U.S. dollars extending to early next year and cut spending by 917 billion dollars over a decade.

According to the legislation rewritten overnight, the second tranche of debt limit increase next year would be contingent on Congress approving a balanced budget amendment to the Constitution and sending it to the states for ratification.

Senate Democratic Leader Harry Reid, a Democrat, is expected to move forward with a different approach that aims to get enough votes from both parties to pass Congress before an Aug. 2 deadline.

The Democratic plan will grant the U.S. government borrowing authority extended long enough to reach the end of 2012 when the next presidential election is over.

 
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