The Republican-led US House of Representatives failed on Tuesday to come up with a plan for voting to raise the debt ceiling and reopen the government as they failed to garner enough support.
House Speaker John Boehner tried twice on Tuesday to move a debt limit and government funding bill to the House floor for passage in vain. The House hoped to clinch a deal that will fund the government through mid-December and lift the debt limit through February 7 for voting.
Representative Pete Sessions, a senior House Republican, told reporters after a meeting in Boehner's office that Republicans would try to patch up a new plan on Wednesday. The US government faces a Thursday default deadline.
After a meeting with GOP members Tuesday morning, Boehner said that they were trying to find a way forward in a "bipartisan way."
In order to garner enough support, House GOP leaders dropped a demand to delay a medical device tax mandated by Obamacare, but still kept some changes to the healthcare law.
As House Republicans struggled with their own debt ceiling and government funding bill, Senate Minority Leader Mitch McConnell and Senate Majority Leader Harry Reid appeared close to a tentative deal on the matter.
The delay in vote came amid growing concerns over the reliability of the US debt. Credit agency Fitch Ratings issued a warning Tuesday afternoon that it would downgrade the sovereign credit rating of the United States from AAA, citing the political brinkmanship over raising the federal government's borrowing limit.
Fitch said although it continues to believe the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default.
"Although the (US) Treasury would still have limited capacity to make payments after Oct. 17, it would be exposed to volatile revenue and expenditure flows," it said.
A failure by the US government to honor interest or principal payments on the due date of US Treasury securities would lead Fitch to downgrade the country's sovereign issuer default rating to "restricted default," it warned.
The US Treasury has made it clear that extraordinary measures will be exhausted by Oct. 17, when the government will be left with only 30 billion US dollars of cash on hand, whereas its daily payments can run up to 60 billion dollars.