Senate Resumes Talks After House Vote Cancelled

24/7 Wall St.

The seemingly never-ending story of negotiations to end the Washington stalemate over the looming debt ceiling took a few more unexpected turns this after. First, the U.S. House cancelled a hastily-scheduled vote on a Republican plan that would have reopened the federal government and kept it open until December 15th. The plan also would have temporarily raised the debt ceiling until February 7th.

The vote was cancelled when it became clear that there were not enough Republican votes to approve it. A conservation organization called Heritage Action said the proposed stop-gap measure "would do nothing to stop Obamacare’s massive new entitlements from taking root — radically changing the nature of American health care."

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Following that twist, Senate leaders from both parties agreed to restart their own negotiations. The Senate plan would have opened the government until January 15th and extended the debt ceiling for the same period as the House plan.

As the U.S. gets nearer to running out of its borrowing authority the financial industry gets more and more nervous. Fitch Ratings has placed the U.S. on negative watch for a ratings downgrade. Fitch maintained the country's 'AAA' rating throughout a similar threat not to raise the debt ceiling in 2011. Fitch did put the U.S. on negative watch in 2011, but once that stalemate was resolved that status was removed.

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