The House overwhelmingly refused to raise the nation's borrowing ability Tuesday — a largely symbolic vote designed to bolster Republican arguments that a successful measure must include deep spending cuts and sweeping policy revisions.
Failure to increase the borrowing capacity would result in a first-ever federal default, which experts predict would lead to turmoil in financial markets and severe economic consequences.
House leaders took steps to assure Wall Street that Congress does not intend to risk default, reaching out to market leaders before Tuesday's vote — which was scheduled in the evening, after U.S. financial markets had closed.
"Today, we are making clear that Republicans will not accept an increase in our nation's debt limit without substantial spending cuts and real budgetary reforms," said Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee.
Democrats charged that Republicans were playing with fire as they tried to force GOP priorities, including the Republican proposal to revamp Medicare, into the budget talks.