NY Times
By JONATHAN WEISMAN
9/26/2013

. . a list of Republican priorities, including a one-year delay of the health care law . .
House G.O.P. Raises Stakes in Debt-Ceiling Fight

WASHINGTON — With no serious negotiations in sight, a disorderly and divided Congress slipped closer to a double-barreled fiscal crisis on Thursday as House Republican leaders tried to shift the budget dispute to a fight over raising the government’s borrowing limit.

Trying to round up votes from a reluctant rank and file, House Republicans said they would agree to increase the debt limit to avert a mid-October default only if Democrats accepted a list of Republican priorities, including a one-year delay of the health care law, a tax overhaul and a broad rollback of environmental regulations.

At the same time, Speaker John A. Boehner of Ohio signaled he was not ready to abandon a spending fight that could shut down the federal government as soon as Tuesday. Asked whether he would put a stopgap spending bill to a vote free of Republican policy prescriptions, he answered, “I do not see that happening.”

President Obama, who has faced three years of down-to-the-wire standoffs that have nearly ended in default or shutdowns a half-dozen times, fired back with a broadside of his own.

“No Congress before this one has ever, ever, in history been irresponsible enough to threaten default, to threaten an economic shutdown, to suggest America not pay its bills, just to try to blackmail a president into giving them some concessions on issues that have nothing to do with a budget,” Mr. Obama said before a friendly audience in suburban Washington.

The bitter back and forth in the absence of any high-level discussions between Republicans and Democrats was seen as increasing the possibility of a shutdown or default. It was a marked contrast from past showdowns when talks were taking place behind the scenes even as the parties traded public partisan shots.

The Senate faces a critical vote on Friday to cut off debate on legislation to keep the government open. If Democrats muster 60 votes, Senator Harry Reid of Nevada, the majority leader, will move to strip out House language that guts the health care law and pass a stopgap spending bill that finances the government through Nov. 15, without Republican policy prescriptions.

At that point, no one is sure how the House will react.

“There is no secret room where everyone is sitting down and hashing this out,” said Senator Patty Murray, the Washington Democrat who is chairwoman of the Senate Budget Committee.

Representative Eric Cantor of Virginia, the House majority leader, encouraged Democrats to come to the table.

“We call on the president to sit down with us, Harry Reid to sit down with us, and let’s resolve this problem,” he said.

But in their efforts to unify restive Republicans, House leaders were only widening the partisan divisions. Behind closed doors on Thursday, they laid out their demands for a debt ceiling increase that include the health law delay, fast-track authority to overhaul the tax code, construction of the Keystone XL oil pipeline, offshore oil and gas production and more permitting of energy exploration on federal lands.

The legislation would also roll back regulations on coal ash, block new Environmental Protection Agency regulations on greenhouse gas production, eliminate a $23 billion fund to ensure the orderly dissolution of failed major banks, eliminate mandatory contributions to the new Consumer Financial Protection Bureau, limit medical malpractice lawsuits and increase means testing for Medicare, among other provisions.

Even with that legislative Christmas tree, many Republican backbenchers balked. After introducing the measure to his divided troops, a sheepish speaker of the House faced the press with a grimace. “Oh, this ought to be a blast,” Mr. Boehner sighed as he opened a news conference for questions.

Senator Charles E. Schumer of New York, the No. 2 Democrat, derided the proposal. “The House is attaching the Republican Party platform to the debt ceiling,” he said. “In a week full of absurdities, this one takes the cake.”

Republican divisions in the Senate burst into full public view on Thursday. Incensed that hard-liners in his party were slowing final votes on legislation to keep the government open, Senator Bob Corker, Republican of Tennessee, went to the Senate floor to accuse two fellow Republican senators, Ted Cruz of Texas and Mike Lee of Utah, of grandstanding for the benefit of their conservative-activist followers.

“Y’all have sent out releases and e-mails, and you want everybody to be able to watch,” he charged.

Economists of all political persuasions have warned that a failure to raise the debt ceiling by the Treasury’s deadline of Oct. 17 could be catastrophic. The world economy’s faith in the safety of Treasury debt would be shaken for years. Interest rates could shoot up, and stock prices worldwide would most likely plummet.

“Defaulting on any obligation of the U.S. government would be a dangerous gamble,” Doug Elmendorf, the director of the nonpartisan Congressional Budget Office, told the House Budget Committee on Thursday. “In a very uncertain world, the one thing everyone has been able to count on is that the U.S. government will pay its bills on time.”

But many House Republicans put little stock in such pronouncements.

“Economists, what have they been doing? They make all sorts of predictions,” said Representative John Fleming, Republican of Louisiana. “Many times they’re wrong, so I don’t think we should run government based on economists’ predictions.”

Those who do believe in the dangers said that they provide precisely the leverage they need to win passage of their priorities.

“People have to recognize there’s never any compromise until the stakes are high,” said Representative Dana Rohrabacher, Republican of California. “In our society, that’s the nature of democratic government.”

With the twin clocks ticking, Democratic leaders seem paralyzed by rage, claiming Republicans are relying on Democrats to be “the responsible adult in the room” and cave to their hostage-taking.

“They have a responsibility to the country. They have a responsibility to their constituents and their children,” said Representative Steny H. Hoyer of Maryland, the House’s No. 2 Democrat. “They are damaging the country, and the public ought to make them pay a price.”

Democrats — and some Republicans — worried that the shift to the debt-ceiling fight is leaving the government heading to a shutdown on Tuesday with no resolution in sight.

“I’d like to see us keep that focus there,” said Representative Tom Graves, Republican of Georgia, who led the fight to link further government funding to gutting the Affordable Care Act. “We’ve got a responsibility to finish this up and let it play out.”

Ms. Murray said the shift in focus from a short-term stopgap spending bill that keeps the government open to the debt ceiling is coming because “Republicans realize fighting a small battle over a small bill is a waste of time.”

She called the House debt ceiling “Christmas list” unserious.

“This is not the time to throw in your 50 favorite flavors,” she said. “You can’t just throw everything against the wall and see what happens.”

Ashley Parker contributed reporting.

http://www.nytimes.com/2013/09/27/us/politics/house-gop-leaders-list-conditions-for-raising-debt-ceiling.html?hp&_r=0