Vote to launch debt ceiling debate

For months each side’s leaders have talked publicly and privately about how the financial markets would react if the Treasury is unable to raise the debt limit, with speculation that the country would default on its outstanding loans and cause broad panic in the global markets.

With the vote today, Republican leaders believe they have created a buffer by showing their intentions and holding the vote a full two months before Treasury Secretary Timothy F. Geithner set an Aug. 2 deadline for lifting the debt ceiling.

Also, the vote will be held after 6:30 p.m., when the markets will be closed. House leaders do not want a repeat of the September 2008 vote in which the House at first rejected the $700 billion Wall Street bailout and triggered the single largest one-day drop in stock prices ever.

This vote is not expected to be close, as nearly every Republican and many Democrats are likely to oppose what in years past was the routine decision to increase the debt ceiling.

After the vote fails, the focus will return to a bipartisan group of six congressional leaders who have been in private talks with Vice President Joe Biden to come up with a massive spending cut package and allow the debt ceiling to rise. Both sides say they will easily exceed $1 trillion in cuts, with the vice president suggesting that number is only a “down payment’’ to agreement on much greater reductions by the August deadline.

With the Senate out of session this week, the next round of Biden talks is set for next week.

Early proposals for whittling down spending include a plan to drop federal agriculture subsidies and to require larger employee contributions to the pension system for nonmilitary federal workers.