Senate announces deal to raise debt limit, end government shutdown
Senate announces deal to raise debt limit, end government shutdown
http://img.washingtonpost.com/rf/ima...ehner_full.jpgVideo: House Speaker John Boehner said Tuesday there were "a lot of opinions about what direction to go" on government shutdown negotiations after a meeting with House Republicans.
By Lori Montgomery and Paul Kane, Updated: Wednesday, October 16, 9:10 AME-mail the writers
BREAKING NEWS: The Senate’s Democratic leader announced a deal Wednesday to raise the federal debt limit and end the government shutdown. The deal faces a Senate vote and must also be approved by the Republican-controlled House.
Top aides to Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) are forging a deal to raise the debt limitthrough Feb. 7 and end the 16-day-old government shutdown, after a House Republican effort to forge a solution collapsed Tuesday in humiliating failure.
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“We are getting real close,” Sen. Charles E. Schumer (D-N.Y.) said just before 11 a.m., as Republicans began a meeting at which they were expected to finalize the plan.
Any deal would also have to win approval in the House, where Speaker John A. Boehner (R-Ohio) and his leadership team have once again lost all control of their majority. Democrats say there are enough Republicans who will vote with them in support of the bill for it to pass, and conservative Rep. Jim Jordan (R-Ohio) acknowledged that it appeared likely that the House will approve the Senate deal using mostly Democratic votes.
“It seems to be where it’s headed,” Jordan said Wednesday, adding that he and other conservatives will remain strenuously opposed.
[Read the latest updates here.]
Unless Congress acts by Thursday, Treasury Secretary Jack Lew will be left with just $30 billion in cash and a fluctuating flow of incoming tax revenue to pay the nation’s bills. While Lew is unlikely to begin missing payments immediately, independent analysts say he would run short of funds no later than Nov. 1.
In addition to lifting the$16.7 trillion debt limit, the emerging measure would fund the government through Jan. 15, delaying the next threat of a shutdown until after the holidays. It would set up a conference committee to hammer out broader budget issues, such as whether to replace deep cuts to agency budgets known as the sequester with other savings.
Under the Senate proposal, Republicans who shut down the government in a bid to undermine President Obama’s health-care program would win no major changes to the law. But they would get additional safeguards to ensure that people who receive subsidies to buy health insurance are in fact eligible.
Democrats dropped their demand to delay a new tax on existing health-insurance plans, a change intended to benefit organized labor. And Republicans backed off their push to deny the Treasury Department flexibility to manage the nation’s books after Feb. 7, an aborted attempt to ensure that the short-term extension of the debt limit doesn’t somehow drag on into the spring.
As Sen. Lindsey O. Graham (R-S.C.) headed into the meeting of the Senate Republican Conference on Wednesday, he said the looming debt deadline — after a bitter, weeks-long standoff — meant that Republicans at this point had little or no leverage.
“This package is a joke compared to what we could have gotten if we had a more reasonable approach,” said Graham, noting that the entire process seems likely to be repeated said. “For the party, this is a moment of self-evaluation; we are going to assess how we got here. If we continue down this path, we are really going to hurt the Republican Party long term.”
The financial world is carefully watching the chaos on Capitol Hill, and reacted to news Wednesday that a deal was close with a surge in U.S. markets. The Dow Jones industrial avenue, the S&P 500 and the Nasdaq each were up more than 1 percent.
Markets closed down Tuesday, when the inability of House lawmakers to forge their own bill on left Washington lurching toward the borrowing deadline with no clear plan for avoiding a government default. Fitch Ratings, the third-largest credit-rating agency, took a step toward a potential downgrade of the government’s AAA rating. Fitch warned that “political brinksmanship and reduced financing flexibility” were elevating the risk of default.
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[Related: A shutdown Q& A]
It remains unclear whether the legislation could become law before the Treasury Department exhausts its borrowing power Thursday. Meeting that deadline would be impossible if Sen. Ted Cruz (R-Tex.) or other conservative hard-liners choose to throw up roadblocks, Democrats said. Republican leaders were leaning on Cruz and his allies to avoid unnecessary delays.
“The clock is ticking,” said Sen. John Thune (R-S.D.), the No. 3 Republican in the Senate. “Given the consequence of what we’re talking about here, . . . I would hope that we would have genuine interest among all parties in terms of trying to get this done as quickly as possible.”
Durbin, the Senate’s No. 2 Democrat and chief vote counter, predicted that the final package would easily pass the Senate with support from both parties.
“With McConnell’s name on it,” he said, “we feel it will get a good, strong vote.”
Its fate in the House, however, is less uncertain. Minority Leader Nancy Pelosi (D-Calif.) has pledged the support of all 200 Democrats, meaning Boehner would have to supply at least 17 votes.
Democrats — and some Senate Republicans — are urging Boehner to draft the emerging Senate deal into legislation and let the House vote as soon as Wednesday, even before the Senate takes up the bill.
Reid could move much more quickly to final passage in the Senate if the House approves the bill first, and could send a bill to Obama’s desk before the Thursday deadline if Cruz and his allies did not object.
House GOP officials said they had yet to decide how to proceed. Passing the Senate bill before the Senate had even taken a vote would amount to a complete capitulation to the upper chamber, the latest embarrassment in a speakership riddled with dark moments.
A few minutes after 11 am, House Majority Whip Kevin McCarthy (R-Calif.) emerged from Boehner’s office and told reporters there was still “no decision.” McCarthy said the House would wait until the Senate announce what, exactly, its bill would do before deciding its next move.
“This should not be about someone’s speakership. This should not be about the next election,” Sen. Lisa Murkowski (R-Alaska), a member of the bipartisan group of senators that helped draft the Senate bill, said on the “Today” show. “This is about the future of our country.” Ironically, the current debacle began with Boehner’s friends in the Senate — recognizing that McConnell was close to a deal with Reid — deciding to pause those talks to give Boehner a chance to consolidate his weakening hold on power. If Boehner had been able to rally support for a measure more palatable to Republicans, it would have strengthened McConnell’s hand.
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Boehner “would establish himself as the leader of the House, which is good for the country,” Sen. Lindsey O. Graham (R-S.C.) told reporters as he left the Senate GOP’s weekly luncheon Tuesday afternoon. “This is offense for us,” Graham said optimistically. “This is a defining moment for the speaker.”
Graham, Saxby Chambliss (Ga.) and other GOP senators had pleaded with Boehner late last week to try to pass a bill that would give Senate Republicans leverage in their talks with Reid. On Monday, Boehner met with McConnell and several other Senate Republicans. And on Tuesday, Boehner was ready to go.
He started the day by convening a 9 a.m. meeting of his rank and file, a session that opened with a prayerful group sing-along to the hymn “Amazing Grace.” But as Boehner began searching for items to attach to the debt-limit bill, his majority quickly dis*integrated into squabbling ideological factions.
Boehner’s initial proposal was to include two provisions that would have given conservatives some small measure of satisfaction in exchange for ending the government shutdown and raising the debt limit. One would have delayed a tax on medical devices that helps finance the new health-care law. The other would have ended employer-provided health subsidies given to lawmakers and members of the executive branch, who are required to join the new health-care exchanges.
But conservatives quickly complained that it wasn’t enough. The bill would not cut spending, they said, or reform entitlement programs, or erase a clause in the health law that requires employers to provide coverage for contraception. And it clearly would not achieve their ultimate goal of ending the program they call Obamacare.
As the bickering continued, senior aides to rank-and-file Republicans resorted to watching the Twitter feeds of congressional reporters to learn who was demanding what.
By midafternoon, House leaders appeared to be rallying around a new measure. This one would not delay the medical-device tax, but it would add congressional staffers to the group of federal employees who would no longer receive any help from their employer to buy health insurance.
The proposal amounted to a $5,000 pay cut for those with individual coverage and a $10,000 cut for those with families. But conservatives theorized that Senate Democrats would have to approve it or risk looking as if they were protecting their own health benefits. And that would motivate them to reopen the health-care law, the theory went.
House leaders scheduled a vote for late Tuesday evening.
But in the end, that idea didn’t fly either. One by one, recalcitrant lawmakers were dragged to Boehner’s office. One by one, they emerged shaking their heads.
Mainstream conservatives were also unhappy. After shutting the government down for 15 days, they would get nothing — not even the meager concessions McConnell and Reid had been discussing.
The final blow came shortly after 5 p.m., when Heritage Action for America, the powerful conservative group that drove Republicans to attack Obama’s health-care initiative, sent an e-mail urging lawmakers to vote no because the House bill “will do nothing to stop Obamacare’s massive new entitlements from taking root.”
Soon after, Boehner canceled the vote. He and his deputies left the Capitol without further plan or explanation.
“We are done for the night,” a weary McCarthy said.
An hour later, Majority Leader Eric Cantor (R-Va.) issued an alert telling lawmakers that the House would be in session Wednesday. No specific legislation was listed for consideration.
As for the timing of any votes, Cantor advised: “<acronym title="To be discussed"><acronym title="To be discussed">TBD</acronym></acronym>.”
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