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New delay in US debt crisis as John Boehner, the Republican leader in the House, fails to persuade enough hardline conservatives to support his bill Hopes of the US debt crisis being resolved soon began to recede on Thursday night when the Republicans humiliatingly failed to get even their own bill through the House, exposing deep divisions within their own party. The Republican leader in the House, John Boehner, had to abandon the attempt on Thursday night after failing to persuade enough hardline conservatives to support his bill. He may try again on Friday. The incident demonstrated the power of these hardline conservatives, many of them elected last November with the backing of the Tea Party movement. The vote fiasco added to the sense of chaos and confusion as time was running out for a deal to resolve the debt crisis. With Boehner unable to control his own members, the chances of compromise with the Democrats could be harder to achieve. The episode may unnerve global markets still hoping for an eventual compromise. The White House is beginning to make emergency plans for the 2 August deadline to avoid the US defaulting on its borrowing for the first time in its history, a move that could throw the US and world economy into turmoil. Boehner had promised earlier in the day there would be a vote on Thursday on a bill to raise the $14.3 trillion($8.7tn) debt ceiling and cutting billions in spending. But Boehner found he could not win over enough of the conservatives to secure the 216 votes needed to get his new bill through the Republican-controlled House. Boehner, scheduled a vote for 6pm in the evening on a new bill. To the embarrassment of Boehner, he had to postpone the vote for hours as he tried to persuade enough Republicans to pass his bill. Eventually, at 10pm, the House majority Kevin McCarthy told reporters that the vote had been abandoned for the night. Even if the bill had been passed, Democrats in the Senate said they would kill it, as did the White House. Fifty-one Democratic members of the Senate, a majority, published a letter pledging to vote against the House bill. Democrats in the Senate are preparing a bill of their own but the chances are Republicans in the House would vote that down too. Global markets, initially sanguine about the crisis and confident of an eventual compromise, were increasingly jittery yesterday. There were early market falls but US stocks gained and the dollar rose during the day, buoyed by unexpectedly good unemployment figures. The Democratic leader in the Senate, Harry Reid, warned: “Default will rock our financial system to its core.” He expressed hope that there could still be a deal. “Magic things can happen here in Congress in a very short period of time under the right circumstances,” he said. The White House, too, expressed optimism that a compromise could be reached. Negotiations are continuing in private between the White House and senior Republicans and Democrats on a possible short-term emergency deal. But the White House spokesman Jay Carney admitted that, in the event there is no deal, the treasury would explain its plans in detail before 2 August. Carney said: “As we get closer to that date, the treasury will explain how it will manage a situation that is impossible.” He acknowledged for the first time that the uncertainty was already causing harm to the US economy. The White House will almost certainly make its priority paying interest on its debts so that the US does not default for the first time in its history. But the consequence could be delaying monthly payments to federal workers, soldiers and other employees, and millions of cheques to social security recipients, veterans and others. The treasury said it would release details in the coming days regarding which payments will take priority over others. It makes an average of 80m payments a month. It also said it would go ahead with its regular weekly auction of three-month and six-month treasury bills on Monday – a day before the deadline. The money raised from that auction will go towards redeeming $87m in securities that will mature on 4 August. The treasury said this operation would not breach the current borrowing limit. Treasury secretary Timothy Geithner has said that after Tuesday he will have exhausted all the manoeuvres he can use to clear room under the current $14.3tn borrowing limit. The government reached its borrowing limit in May. The US needs to borrow $125bn in new debt each month, in addition to $500bn in maturing debt that it must refinance each month. The debt debate is creating bitter divisions inside the Republican party, between the newer members of Congress elected last November with the support of the Tea Party movement, which campaigned for deep spending cuts, and older members used to reaching compromises with their Democratic counterparts. Senator John McCain, the party’s presidential candidate against Obama in 2008, labelled as “bizarro” the hardline colleagues in the House who had been in Congress for only seven months. But one of the hardliners, Congressman Joe Walsh, who is aligned with the Tea Party movement, hit back that McCain had “been in this town too long” and had helped get the US into a mess. In the Senate, another conservative, Jim DeMint, who is closely allied to the Tea Party movement, warned that he would filibuster any Senate bill that offered only a short-term solution without significant spending cuts. A White House adviser, David Plouffe, in an interview with MSNBC, suggested one way out of the impasse would be to amalgamate the House and Senate bills. “What you’re going to have to do is reconcile what’s in Reid and Boehner, which is a lot of the things the president has talked about in terms of spending cuts he’d be willing to accept. And that’s where the compromise is,” Plouffe said. United States US Congress US politics Republicans Democrats Obama administration US economy Financial crisis Ewen MacAskill guardian.co.uk