The Democratic Party-controlled U.S. Senate has blocked a plan passed by the Republican-controlled House of Representatives to cut the country's budget and raise its debt ceiling. The vote Friday puts the emphasis on talks between the White House and top lawmakers to find a deal to raise the debt ceiling before a deadline on August 2.
A simple majority was needed to table, or kill, further consideration of the bill. The vote was 51 to 46.
Just one hour of comments were allowed before the vote took place.
Senate Majority Leader Harry Reid, who had called the House bill one of the worst he has ever seen, said it was now urgent to look for a feasible solution.
"There is simply no more time to waste debating and voting on measures that have no hopes of becoming law. We have no more time to waste playing partisan games," said Reid. "As the saying goes, indecision becomes decision with time. Our time is running out before this gridlock, this refusal by the other side to move even an inch toward compromise becomes a decision to default on our debt."
In the short time they had to speak, Republicans on the Senate floor all backed the "Cut, Cap and Balance Act." It would have raised the debt limit by $2.4 trillion on the condition that Congress send a constitutional balanced budget amendment to the states for ratification and approve trillions in long-term spending cuts.
The Senate minority leader, Kentucky Republican Mitch McConnell, accused Democrats of being in a state of denial.
"Too many Democrats refuse to admit that Washington has a spending problem. That is why Republicans have insisted that we focus on spending in this debate," McConnell said. "The reason we have got a $14 trillion debt is because no matter how much money Washington has it always spends more."
The comments highlighted the sharp divisions between the two parties, as negotiations to find a deal stumble along.
Democrats said the law proposed by the House would have turned a recession into a depression. They said it would cut, cap and kill social spending programs and defend tax havens. They accused former Republican President George W. Bush of creating the deficit problem by paying for the Iraq war with tax cuts. They also warned against any deal that would only favor wealthy Americans.
Republicans accused Democratic senators of lacking leadership since they said they have not proposed their own plan. They took offense that the act had been blocked with a dismissal vote, rather than a full debate and work on amendments. They accused Democratic President Barack Obama of pretending to be a fiscal moderate in recent days, but coming short of that ideal in his actions.
Senior aides to lawmakers said both sides are now searching for what they called a magic formula to avoid a debt default, with the White House at the center of efforts to find a compromise.