In it, but not of it. TPM DC

GOP Gives Up On Obamacare And Keystone Debt Limit Demands

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AP Photo / J. Scott Applewhite

It's a major setback for House Republicans, who have insisted on extracting concessions for raising the country's borrowing limit. They have indicated for weeks that they'll force another hostage standoff, but their efforts to come up with a ransom demand have -- perhaps predictably -- failed.

"When even Rep. [Raul] Labrador is saying that this time Republicans should be honest that they can't win a ransom on the debt limit, it's time for Speaker Boehner to admit defeat and stop playing games with the economy," said a senior Democratic Senate aide.

The country will exhaust its borrowing authority in late February, Treasury Secretary Jack Lew reaffirmed this week, urging Congress to act quickly to raise the debt limit and avert a potentially catastrophic default.