US Senate, House closing in on funding, debt deals

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October 16, 2013

The White House soundly rejected a House plan to avoid default. In the Senate, Democrats and Republicans continued working on their own plan.

President Barack Obama calls a House debt limit bill too "partisan."

October 16, 2013

The White House soundly rejected a House plan to avoid default. In the Senate, Democrats and Republicans continued working on their own plan.

President Barack Obama calls a House debt limit bill too "partisan."

WASHINGTON — Leaders in the House of Representatives and Senate were negotiating separate but similar plans Tuesday to reopen the U.S. government and prevent a default on American debt that economists say could tip the global economy back into recession.

The Senate moved first, taking the country halfway toward solving a bitter fight between Republicans and President Barack Obama's Democrats over government spending. In the House of Representatives, Republican leaders began moving Tuesday toward a similar deal, apparently viewing a shift in tactics as inevitable. Many conservatives, however, still were standing fast against the plan that would fund the government through Jan. 15 and allow the Treasury to borrow money to pay U.S. bills until February.

And the White House quickly voiced opposition to the House measure.

"The President has said repeatedly that members of Congress don't get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nation's bills," said Amy Brundage, a White House spokeswoman. "Unfortunately, the latest proposal from House Republicans does just that in a partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first place."

House officials told The Associated Press on Tuesday that Speaker John Boehner and other Republican leaders had outlined their own bill that also would keep the government running into the New Year and raise the debt limit to Feb. 7. The measure is separate from a deal emerging in the Senate.

But in a brief meeting with reporters Tuesday morning, Boehner and the House Republican leadership said their plan was focused on "fairness for the American people under Obamacare" an indication that they wanted to insure the elimination of health care subsidies for the president, vice president, his Cabinet and members of Congress, and tighter income verification requirements for individuals who qualify for federal subsidies under the health care law.

House Minority Leader Nancy Pelosi said it was clear that Boehner had failed to win the backing of sufficient House Republicans to support the plan that had been floated earlier in the day.

With just two days left before the Treasury Department says it will run out of borrowing capacity, congressional aides predicted Democratic Senate Majority Leader Harry Reid and Republican leader Mitch McConnell could seal an agreement by midday, easing dual crises that have sapped confidence in the world's dominant economy and badly shaken support for Republicans. Both House and Senate Republican leaders scheduled private meetings with their rank-and-file Tuesday.

The partial government shutdown, which has furloughed 350,000 federal workers, began on Oct. 1 after Congress failed to pass a bill to temporarily funding the government. Separately, if Congress doesn't approve a measure increasing the amount of money the government is allowed to borrow, the Obama administration says it will not be able to pay America's bills on time, risking a default that analysts say could prove catastrophic for the economy. Both legislative measures are normally routine.

With Republican poll numbers plummeting and Americans growing weary of a shutdown entering its third week, Senate Republicans in particular were eager to end the partial government shutdown — and avoid an even greater crisis if the government were to default later this month.

The U.S. stock market was mixed Tuesday morning, while stocks in Asia and Europe were tracking upward.

While Boehner was vague about a vote in the House, Republican Rep. Darrell Issa said his party planned to pass its measure later Tuesday. The House Republican plan wouldn't win nearly as many concessions from Obama that Republicans had sought but it would set up another battle with the White House early next year. It also likely wouldn't get much support from Democrats.

The bipartisan Senate plan under, meanwhile, is far from the assault on Obama's signature health care reform law that conservative tea-party Republicans originally demanded as a condition for a short-term funding bill to keep the government fully operational. It also lacks the budget cuts demanded by Republicans in exchange for increasing the government's $16.7 trillion borrowing limit.

Instead, it appeared likely and may repeal a $63 fee that companies must pay for each person they cover beginning in 2014.

Any legislation backed by both Reid and McConnell can be expected to sail through the Senate, though any individual senator could delay it.

It had been a different story in the Republican-controlled House of Representatives, where conservative backing is proving hard to find.

Republican Rep. Joe Barton signaled that conservative members of the House were deeply skeptical. He said Monday the plan to end the crisis must have deep spending cuts to win his vote and that he thought Obama and Treasury Secretary Jacob Lew had more flexibility than they had said publicly.

"No deal is better than a bad deal," Barton said.

Asked whether the emerging package contained any victories for Republicans, Rep. James Lankford, a member of the House Republican leadership, said, "Not that I've seen so far, no."

In addition to approving legislation to fund the government until late this year and avert a possible debt crisis later this week or month, the potential deals would set up broader budget negotiations between the Republican-controlled House and Democratic-led Senate with one goal being to ease automatic spending cuts that began in March and could deepen in January, when about $20 billion in further cuts are set to slam the Defense Department.

Democrats don't want to repeal the medical device tax and also want to preserve the Treasury Department's ability to use extraordinary accounting measures to buy additional time after the government reaches any extended debt ceiling. Such measures have permitted Treasury to avert a default for almost five months since the government officially hit the debt limit in mid-May, but wouldn't provide that much time next year, experts said.


Courtesy: AP