Members of Congress are racing against the clock to hammer out a deal that would reopen the government and lift the risk of default before October 17. On that day, the country will hit the ‘debt ceiling’ — that’s the day when the U.S. exhausts its borrowing authority, and, if there’s no deal, we’ll be forced to pay our bills with whatever cash is on hand, raising a serious prospect of default.
House Republicans brought the government to a shutdown by refusing to fund Obamacare, but with the added leverage of the debt ceiling, their demands have since grown. As we reach the final hours before the deadline, here’s the latest news on where we stand on getting a deal done:
Here’s what’s in the Senate deal that will go before both the House and Senate today:
· Government funded through January 15 at sequestration levels
· Debt limit extended until February 7
· A budget conference established to come up with long-term spending plans by December 13
· Income verification for recipients of subsidies under Obamacare’s newly-established exchanges
· Backpay for furloughed workers
Perhaps more notably, here are some of the demands that Republicans have made in the last few days, but that are NOT in the bill:
· No flexibility in how government agencies make budget cuts to their , as they are required to under sequestration
· No repeal, replacement, or delay of any aspects of Obamacare’s exchanges or individual mandate
It might look like this is overall a good deal for Democrats given the number of things that Republicans . getting. It is good: It reopens the government and lifts the debt ceiling without doing any major additional damage to existing
But it’s important to remember that the baseline for negotiations wasn’t exactly even: Democrats accepted the major budget cuts of sequestration (slated only to get worse on January 15, the same day their budget deal expires), and their only demand was actually the status quo: Keeping the government running and having the country fulfill its financial obligations. They didn’t request to restore the funding sequestration took away, they didn’t demand any new or initiatives that Democrats support. And if the previous is any indication, the one established under this deal has the potential to blow up in Democrats’ faces, leading to more cuts instead of an actual, long-term budget. In that sense, while it is the best, cleanest deal we can get, the Democratic party has been pulled slightly from center to right, not from left to center.
Meanwhile, Republicans threw everything but the kitchen sink into their negotiations. It’s no surprise they’re taking a lot of losses.
On top of all that, this deal marks the second time in our nation’s history that the debt ceiling has become a bargaining chip. While there were brief hints that the deal would include a provision that required a proactive vote to to rely on . extending the debt limit, as opposed to having votes to raise it, that was taken out of negotiations. Long-term, this is bad news for the nation’s economy, since it means we’ll
The deal emerging this morning sounds very promising, but even if Boehner accepts it and the House passes it, there’s another major hitch that could grind progress to a halt: A filibuster in the Senate. The House votes first and then the bill goes to the Senate for a final vote, it’ll need something called “unanimous consent” to move the bill quickly to the President’s desk. If one senator decides to block that, the process could potentially take days, and force the country to breach the debt limit.
There are three major filibuster risks in the Senate: Tea partiers Sens. Rand Paul (R-KY), Mike Lee (R-UT), and Sen. Ted Cruz (R-TX), who think the bill doesn’t do enough for Republican demands.
Paul has indicated that he doesn’t plan to filibuster this time around. “I think it’s not a good idea to go through the debt ceiling deadline,” Paul . “I think we should go ahead and have an agreement in advance.”
But Lee and Cruz are unknowns, and Cruz has definitely that he’d be willing to fight it out to the last. And lee just today indicated he would, too:
Tomorrow’s the day the United States hits its credit limit, but Rep. Steve King (R-IA) is still , though he is backing down a bit:
“I’m not worried about this thing they term default because we are going to service our debt…But I am concerned about all the rhetoric around this, about the weeks and months building up to this point and the utilization of that term default,” King (R-Iowa) said on CNN’s “New Day.”
“I’m concerned that it will scare the markets; I’m concerned that the president’s remarks will scare the markets,” the lawmaker continued.
Markets are already incredibly volatile thanks to the Congressional dysfunction playing out on Capitol Hill. Right now, that looks like a good thing: The Dow on news of a potential deal.
House Speaker John Boehner (R-OH) will bring to a vote on the House floor. And he won’t make any alterations to it first, .
That means that the bill will likely pass with support from both Democratic and Republican Representatives, though without the backing of the far-right tea party contingent that has so far blocked all progress by successfully convincing Boehner not to bring any legislation to a vote.
Boehner is also reportedly considering having the House before sending it to the Senate. This hurries the process along (which we need as we near the deadline and the markets start to panic) by letting the Senate take only one filibuster vote.
The Senate is expected to pass the bill and send it to the President’s desk.
Of course, this could still very well fall apart: Boehner could back out of his agreement to bring the bill to the floor, or he could decide he wants to add new caveats into it. Nothing is a done deal.
The Wall Street Journal released a about the shutdown this morning that places blame squarely on the shoulders of House Republicans.
The editorial board calls out “the small band of 20 or so House conservatives who have been all but running the House since this fiasco began.” They also tell Republicans it’s time to move on from Obamacare obstructionism:
The conservatives thus undermined whatever small leverage the House GOP had left. Senate leaders announced immediately that they would resume negotiating to finish a deal that they would bring to the floor as early as Wednesday [...]
. They picked a goal they couldn’t achieve in trying to defund ObamaCare from one House of Congress, and then they picked a means they couldn’t sustain politically by pursuing a long government shutdown and threatening to blow through the debt limit.
Sen. John McCain (R-AZ) , telling the New York Times, “Republicans have to understand we have lost this battle, as I predicted weeks ago, that we would not be able to win because we were demanding something that was not achievable.” Sen. Lindsey Graham (R-SC) concurred, telling that Republicans “screwed up” and went “too far.”
After House Republicans failed miserably at bringing their own budget and debt limit proposal up for a vote, the Senate last night stepped back in to take a lead on the negotiations. Today, they’re expected to bring up a new bill and then send it to the House for a final vote. Here’s what the Senate’s newest proposal looks like:
· Government funded through January 15
· Debt limit extended until February 7
· A budget conference established to come up with long-term spending plans by December 13
· Income verification for recipients of subsidies under Obamacare’s newly-established exchanges
There are two options for what happens with this proposal: First, the Senate could pass the legislation, then send it to House Speaker John Boehner (R-OH) who in all hopes would swallow his pride and bring it to the floor of the House for a vote, despite vocal opposition from a minority of House Republicans. But doing this would open up the possibility that someone in the Senate — Sen. Ted Cruz (R-TX) seems like a likely candidate — could derail the process before it ever makes it to the House.
The other option is for Senate leaders to urge the House to take up the bill first, then pass it and send it to the Senate (again, under the condition that it actually garners enough support). That system would expedite the process slightly, and could potentially allow the Senate to tweak some of the language in the House’s bill. It would not totally lift the threat, though, that Cruz or one of his Republican colleagues could .
Several outlets now report that House Republicans on their own leadership’s proposal tonight, and that conservative organization Heritage Action’s to the bill .
President Obama will veto a funding/ debt limit bill if it includes the so-called “Vitter Amendment,” . The Vitter Amendment removes employer contributions to the insurance plans of Congressional staffers, members of Congress, and some cabinet members. Without an employer contribution, lower-paid Hill staffers will need to seek out government-provided subsidies offered to enrollees of the Obamacare exchanges — meaning that the Vitter Amendment would actually increase the deficit by $530 million over 10 years, the Congressional Budget Office estimates.
of the bill the House was supposed to vote on tonight. It’s not clear, though, that the vote will actually happen; fresh on the heels of Heritage urging members to vote against it, a House Rules Committee meeting that was scheduled to set the stage for a vote on the bill tonight has been .
House Republican leadership’s budget and debt deal just took a major blow: The conservative organization Heritage Action is urging Republican Representatives not to back the bill, and saying it will make the vote a “key vote” on its legislative scorecard. The organization says the proposal doesn’t do enough to derail obamacare:
Despite overruling OPM’s congressional exemption,. Premiums will continue to skyrocket, cancellation notices will still arrive in the mail, employers will continue reducing hours and bureaucrats will continue reaching deeper and deeper into our health care decisions.
In August of 2011, the last time the government came to loggerheads over the debt ceiling, Standard & Poor’s the credit rating of the United States. A few weeks before that, they put the US on “CreditWatch with negative implications.”
It looks like the same thing is happening again. This time, Fitch Ratings the US on “Rating Watch Negative”:
, by casting doubt over the full faith and credit of the U.S. This “faith” is a key reason why the U.S. ‘AAA’ rating can tolerate a substantially higher level of public debt than other ‘AAA’ sovereigns.
House Republicans might be pushing their agenda in the name of spending reduction, but their latest demand — known as the — might actually to the deficit.
There are several different iterations that have been called the “,” but one proposed version (being called the “full Vitter” in today’s talks) takes away employer contributions to the insurance plans of Congressional staffers, making the lower-paid staffers on Capitol Hill to turn to the government-provided subsidies offered to enrollees of the Obamacare exchanges. This would $530 million over 10 years, the Congressional Budget Office estimates.
House Republicans are emerging with yet another plan — this time to fund the government through December 15, raise the debt limit until February 7th, remove “extraordinary measures” used by the Treasury, and deny employer contributions to Obamacare-based health care plans for all Congressional staff (a measure known as the Vitter Amendment). House Republicans will reportedly leave town after voting on this bill to try to. It’s not clear if votes are there to pass it — of if the House if the President wants them to stay.
Senate Majority Leader Harry Reid’s (D-NV) office says they’ll be standing by with a new Senate deal .
As things reach a lull this afternoon, here’s the state of negotiations:
: House Republican leadership has but is struggling to get the caucus to support it. It may simply fall apart. The latest version of their bill funds the government at sequestration levels until January 15, raises the debt limit until February 7, includes income verification for recipients of subsidies under Obamacare, requires that all Congressional staff and members of the cabinet sign up for the exchanges offered under Obamacare with no employer contribution, and ends the ability of the treasury to take ‘extraordinary measures‘ to avoid default in the future. It also may include a provision to allow employers to deny copay-free birth control to their employees if they have a personal religious objection. Reportedly, the medical device tax delay that was originally part of the effort has been dropped.
: Negotiations are pretty much at a standstill until the House gets its act together. The latest version of a Senate deal rumored to be agreed upon by Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) would fund the government at sequestration levels until January 15, raise the debt limit until February 7, maintain the budget cuts known as sequestration rbut give federal agencies flexibility in how they make those cuts, establishes a committee to negotiate a new budget by December 13th, and includes income verification for ecipients of subsidies for their insurance under the exchanges established by Obamacare.
A sort of odd moment unfolded during today’s White House press briefing, when reporter Tommy Christopher of Mediaite told spokesman Jay Carney a story about how he suffered a heart attack a few years ago. He was uninsured then and has been since.
“Is there a chance,” he asked, “the president would be willing to delay Obamacare for a year if Republicans were to agree to delay heart attacks for a year?”
Christopher followed up Carney’s answer by saying “for what it’s worth, I was able to enroll in the exchanges about a week and a half ago.”
White House Spokesman Jay Carney told reporters during an afternoon press briefing that the administration is not impressed with the House Republicans’ deal that emerged this morning, and reiterated that the White House is not going to “pay ransom to the tea party in order to open the government.”
“The right thing to do is to make no partisan demands as part of Congress doing its basic job,” he added, saying that the President is ready to have longer budget talks when “there are no guns on the table,” meaning no looming threat of default.
The latest thing that House Republicans are demanding in order to throw their support to a funding and debt limit bill? A that allows the owner of a non-religious company to opt out of covering birth control for their female employees, citing religious reasons.
Coverage for birth control copays is one of the provisions in Obamacare, but Republicans have claimed that it requires employers to cover abortion. It does not. And, in fact, the administration has already compromised on the birth control point by some organizations from this provision.
Two things to remember about this latest push: First, even if this is the magic puzzle piece to get House Republicans to approve their leadership’s proposal, it’s not going to go far. Sen. Harry Reid (D-NV) has already indicated that the House proposal is unworkable in the Senate, and this will only make it more unpalatable to Democrats there.
Second, this fight originated over government funding and the country’s debt. It has always been about economics and budget. This demand by Republicans has absolutely nothing to do with the country’s finances, and shows just how little their demands have to do with our fiscal future.
Rep. Chris Van Hollen (D-MD) the Washington Post’s Greg Sargent that the House Republican’s plan has “no Democratic support,” and that “a vote for this is a vote for default and for keeping the government shut down.” House Minority Leader Nancy Pelosi (D-CA) says there is support, however, for the Senate’s plan.
Meanwhile, Republicans aren’t seeing enough support for Republican leadership’s bill on their side of the aisle, either. CNN’s Dana Bash reports that House Republicans to get their proposal passed.
Not content with just requiring members of Congress to enroll in the exchanges set up under Obamacare, the Tea Party Republicans are a provision to force all staff on Capitol Hill to enroll in the exchanges without an employer contribution.
Seventy-five percent of a Hill staffer’s insurance plan has been covered for a long time by their employer, the government. But thanks to some language added by Republicans onto the health care law, all Congressional staff now has to purchase insurance through the exchanges. A few months ago, the Office of Personnel Management that staff can still receive their employer contribution, but they are not eligible for subsidies. This proposal would take away contributions, too, meaning that staffers (even those making earning the lowest congressional salaries) would be required to pay 100 percent of their insurance costs.
Senate Majority Leader Harry Reid (D-NV) said he was “blindsided by the news from the House,” and that it was a “waste of time,” particularly related to the House language that removes the “extraordinary measures” authority from the Treasury, and for removing the budget committee proposed in the Senate plan. “For weeks, Republicans have claimed they want to negotiate,” Reid said. “They’ve complained about a lack of a budget, now they don’t even want us to negotiate a budget.”
“Let’s be clear,” Reid added, “the House Republican legislation will not pass the Senate.”
House Republican leadership today held a brief press conference around 11:00 am. Speaker John Boehner (R-OH) gave little indication of what might happen next. “There’s been no decision about what exactly we will do,” he said. Reps. Cathy McMorris Rodgers (R-WA) and Eric Cantor (R-VA) also spoke, but offered little more than talking points about working “on both sides of the aisle” to reach a deal.
The Obama administration is not interested in what House Republicans are offering. “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,” Amy Brundage, a spokesperson for the White House, said in a statement. “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.”
The proposal in the House bill that would force members of Congress onto the exchanges established under Obamacare without employer subsidies . The 27th amendment to the Constitution stipulates that “[n]o law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.”
Clearly, the talking points show they’re trying to make their proposal sound like a big hit to Obamacare. The top-line talking point reads, “House Republicans are proposing several common-sense changes to make the emerging bipartisan agreement in the Senate fairer for the American people, who are being forced by Washington Democrats to live under the president’s train wreck of a health care law.”
From there, they say that their proposed requirement that members of Congress get health care under the exchanges established by Obamacare (and without any employer contribution) forces members of Congress to “live under ObamaCare” and to “not be shielded from the law.” On income verification for recipients of subsidies under Obamacare, the talking points say their proposal “[shuts] down the Obama Administration’s plan to invite rampant fraud by relying on the so-called ‘honor system.’” They also sell the removal of the treasury’s “extraordinary measures” by saying that their plan “[increases] the transparency of the federal budget process,” and their replacement of the delay of the reinsurance tax with the delay of the medical device tax by saying they’re eliminating “protections for labor unions.”
Some of the more moderate House Republicans are telling reporters that they’re happy to support the House bill but, as Rep. Charlie Dent (R-PA) to TPM’s Sahil Kapur, “I don’t know if the votes are there to pass it.” Despite the fact that the new bill maintains sequestration levels of spending, the further right side of the House Republican caucus is worried there aren’t enough spending cuts. Rep. Mo Brooks (R-AL) even told reporters that he wants a bill that connects the debt limit to a Balanced Budget Amendment — a proposal to amend the constitution to require the United States to maintain a balanced budget. Such an effort is not only for the nation’s economy, it’s also totally since it would require 3/4ths of the United States to ratify it.
In order for the funding and debt bill to pass quickly, it needs what’s called “unanimous consent” in the Senate, which means that every Senator would need to give their okay on expediting the process. So even if the House and most of the Senate can agree on a measure to fund the government and lift the threat of default, that measure could never see the light of day if Sen. Ted Cruz (R-TX) .
On Monday, Cruz hinted that he might not consent, , “We need to see what the details are.” Meanwhile, his tea party partner in crime Sen. Rand Paul (R-KY) said he’s willing to move ahead with a bill, and that he “never really planned on trying to obstruct any of the process.”
The House’s seems to be relatively popular right now. It doesn’t have support of the far-right tea party crowd but, Robert Costa at National Review , that small group’s opposition isn’t influencing the roughly 150 more moderate Republicans who could make or break its passage.
There’s a real chance this proposal could come to the House floor for a vote and pass — particularly given the reports that Speaker Boehner to gauge his party’s support for the measure. That means it could rely on Democrats for passage, and get passed without a majority of Republicans.
This tidbit from Ramesh Ponnuru of National Review spells trouble, if the Senate doesn’t like the House’s proposal:
Rumors are that the House’s emerging deal would end the Treasury’s ability to take what are called extraordinary measures to avoid default. Here’s Neil Irwin’s over at the Washington Post of how extraordinary measures work:
The Treasury has regularly used a variety of cash management tools to enable it to continue to carry out normal spending operations when the nation runs into the legal cap on debt issuance, including timing tricks around public employee pensions and use of the “exchange stabilization fund”…. it’s a little like a family juggling its bills by holding off making a contribution to their 401(k) for a while.
Eliminating these accounting tricks (the full list is ) means we’d actually wind up hitting our debt limit even sooner, and there’d be no temporary way for treasury to stave off default. Extraordinary measures have been used by the Treasury , under both Republican and Democratic administrations.
When removing extraordinary measures was originally floated last week, House Minority Leader Nancy Pelosi (D-CA) , “It certainly isn’t very smart.”
· Funding the government at sequestration levels until January 15
· Raising the debt limit until February 7
· Income verification for recipients of subsidies under Obamacare
· Delay of the medical device tax for 2 years
· A requirement that all members of Congress and members of the cabinet sign up for the exchanges offered under Obamacare, with no employer contribution
Actually, it looks like Democrats have the reinsurance tax, so scratch that. Instead, rumors are that Boehner will with a 2-year delay of the , a 2.3 percent tax on medical devices that Republicans and many Democrats support repealing.
A little bit more on how the “reinsurance tax” part of the Senate deal would work: The Transitional Reinsurance Program was established as part of Obamacare to help spread the inherent risk that comes from accepting everyone (including people with pre-existing conditions) onto insurance plans. It works by taxing all insurers — and, yes, that cost is passed down to the people, to the tune of about $63 per person — and then taking that revenue and reimbursing the individual insurance plans that take on the sicker patients during the first two years (2014-2016) of the new law. The Senate deal would delay the intake of money, but not the payments out.
After a (R-TX) last night, it seems that House Republicans are set to reject the deal Reid and McConnell came up with. As National Review’s Robert Costa reports, the tea party wing of the House Republicans is furious that the Senate came up with a deal without their input:
A flurry of phone calls and meetings last night and early this morning led the consensus among the approximatley 50 Republicans who form the House GOP’s right flank. They’re furious with Senate Republicans for working with Democrats to craft what
This is bad news, since (R-OH) has thus far refused to bring any legislation to the floor that doesn’t have support from this far-right contingent. Politico adds, “One House Republican said they would be lucky to find 20 GOP lawmakers willing to vote for this proposal.”
Last night, Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) reportedly , which McConnelll plans to bring to the Republican caucus this morning at 11 am. Here’s what’s in their deal:
· The government would be funded through January 15th
· The debt ceiling would be extended through February 7th
· The budget cuts known as sequestration remain in place, and January 15 remains deadline for an additional $21 billion in cuts
· Federal agencies get flexibility in how they make the cuts required under sequestration
· A committee would be established to have further talks on budget cuts
· The committee would need to present a proposal by December 13th
· Recipients of subsidies for their insurance under the exchanges established by Obamacare would be subject to income verification