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On edge: House shutdown plan abruptly collapses; now Senate



Published: Wed, October 16, 2013 @ 12:00 a.m.

Associated Press

WASHINGTON

Time growing desperately short, Senate leaders took command of efforts to avert a Treasury default and end the partial government shutdown Tuesday night after a last big attempt by House Republicans abruptly collapsed.

Aides to both Senate Majority Leader Harry Reid and the Republican leader, Mitch McConnell, expressed revived optimism about chances for a swift agreement — by today at the latest — that could pass both houses.

Their efforts toward a bipartisan resolution had seemed likely to bear fruit a day earlier before House conservative were given a last-minute chance for their version.

As hours ticked down toward Thursday’s Treasury deadline, the likeliest compromise included renewed authority for the Treasury to borrow through early February and the government to reopen at least until mid-January.

While a day of secret meetings and frenzied maneuvering unfolded in all corners of the Capitol, Sen. Barbara Mikulski, D-Md., stood on the Senate floor at midafternoon and declared, “We are 33 hours away from becoming a deadbeat nation, not paying its bills to its own people and other creditors.”

In New York, the stock market dropped and the Fitch rating agency warned that it was reviewing the government’s AAA credit rating for a possible downgrade, though no action was near. The firm, one of the three leading U.S. credit-ratings agencies, said that “the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.”

According to Treasury Secretary Jacob Lew, unless Congress acts by Thursday, the government will lose its ability to borrow and will be required to meet its obligations relying only on cash on hand and incoming tax receipts. President Barack Obama and numerous other officials in government and finance have warned of severe economic consequences if federal obligations come due that can’t be paid.

By all accounts, though, an end seems near for the impasse that has once again exposed a government so divided that it sometimes borders on dysfunction. Though the House failed to muster sufficient support for a conservatives-only bill in the GOP-majority chamber on Tuesday, enough Republicans there seem likely to join House Democrats to approve a bipartisan version if it can be approved by the Senate and sent to them.

Politically, neither party is faring well, but polls indicate Republicans are bearing the brunt of public unhappiness as survey after survey shows their approval ratings plunging.

There was no indication Tuesday night of the terms of a possible deal under discussion by Reid and McConnell, although the contours of an agreement had already come into shape Monday, before what amounted to a daylong detour to give Speaker John Boehner and House Republicans time to craft their solution.

As it stood previously, the bipartisan Senate talks were focused on a plan to allow the Treasury to borrow freely through Feb. 7 and reopen the government with enough funds to carry over to mid-January.

Congressional negotiators would be appointed to seek a long-term deficit reduction plan, and in the meantime federal agencies would receive increased flexibility to deal with the impact of across-the-board spending cuts due to take effect Jan. 15.

With Republicans opposed, the likelihood faded for including an earlier proposal to delay a $63-per-person fee that the nation’s health-care overhaul would impose on companies for all who receive coverage under an employer-provided plan.

It appeared likely that any deal would include a provision requiring the Department of Health and Human Services to verify the income of individuals seeking federal subsidies to purchase coverage under Obamacare.

Before Tuesday was devoted to the House Republicans’ effort, those Senate negotiations had seemed headed for success.

House Republican officials unveiled their measure at midmorning, then revised it in hopes of building more support. In its final public form, it would have permitted the Treasury to borrow normally until Feb. 7 and the government to reopen with sufficient funds to carry it to Dec. 15.

Additionally, members of Congress, the president, vice president and thousands of aides would no longer be eligible to receive employer health-care contributions from the government that employs them.

The leadership projected confidence, and Michael Steel, a spokesman for Boehner said in a statement, “The House will vote tonight to reopen the government and avoid default.”

Within a few hours though, objections came from all corners of the rank and file. And Heritage Action, a group with tea- party ties, announced its opposition to the measure it said “will do absolutely nothing to help Americans who are negatively impacted by Obamacare.”

It said it would include the vote in its determinations next year on which candidates to support in the midterm elections.


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