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:
LATEST UPDATE10:21 pm
House Passes Bill: The Deal Is Done
The compromise will now go to the President’s desk to be signed, and then the debt ceiling will be raised and government funding will be restored. The two other major provisions in the bill — creating an income verification for recipients of subsidies under Obamacare’s exchanges, and establishing a committee of Representatives and Senators to have further budget negotiations — will likely be rolled out in the coming days.
Obama Praises Congress For Making A Deal
[UPDATED] 'The Kentucky Kickback'
On first glance, the earmark language looks inoffensive enough:
SEC. 123. Section 3(a)(6) of Public Law 100–676 is amended by striking both occurrences of ‘‘$775,000,000’’ and inserting in lieu thereof, ‘‘$2,918,000,000’’
But when you dig just a little bit deeper, it turns out that Public Law 100–676 is a provision in the Water Resources Development Act of 1988 that funds Olmsted, and that this new provision would increase the cap on construction spending there by $1.2 billion, giving relief to what’s become a cash-strapped project.
Though initial signs indicated that this was a private concession made to McConnell to get him on board with the bill, subsequent reporting muddies the waters a bit. The Washington Post reports that President Obama, not Senator McConnell, requested this funding, while Buzzfeed reports that “[a]lthough the language was inserted by Feinstein and Alexander, whose home state of Tennessee would also benefit from the project, McConnell has been its historical champion.”
This post has been updated to reflect the funding allocated to the Olmstead project.
The Final Bill
After Senate Bill Is Signed, Recall Notices Will Go Out To Government Staff 'Immediately'
Anti-Tax Pundit Is Furious
In an interview with National Review, he slammed Sen. Ted Cruz (R-TX), though not by name, for comparing moderate Republicans to Neville Chamberlain:
“It’d be a good idea if they stopped referring to other Republicans as Hitler appeasers because they opposed the strategy they put forward which failed,” Norquist says. “I think if you make a mistake as big as what they did, you owe your fellow senators and congressmen a big apology — and your constituents, as well, because nothing they did advanced the cause of repealing or dismantling Obamacare.”
Here's Boehner's Full Statement On The Senate Bill
The House has fought with everything it has to convince the president of the United States to engage in bipartisan negotiations aimed at addressing our country’s debt and providing fairness for the American people under ObamaCare. That fight will continue. But blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us. In addition to the risk of default, doing so would open the door for the Democratic majority in Washington to raise taxes again on the American people and undo the spending caps in the 2011 Budget Control Act without replacing them with better spending cuts. With our nation’s economy still struggling under years of the president’s policies, raising taxes is not a viable option. Our drive to stop the train wreck that is the president’s health care law will continue. We will rely on aggressive oversight that highlights the law’s massive flaws and smart, targeted strikes that split the legislative coalition the president has relied upon to force his health care law on the American people.
Third Conservative Organization Comes Out Against Senate BIll
Despite some language addressing the Obama administration’s willful disregard for Obamacare’s income verification requirements, the proposed plan will do absolutely nothing to help Americans who are negatively impacted by Obamacare. 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.
The other conservative organizations in opposition to the bill are Freedomworks and Club for Growth.
One Important Nugget In The Funding Bill
Federal Emergency Management Assistance has continued through the shutdown, but the members of the National Guard who were out repairing roads and bridges in the state couldn’t get paid by the federal government. Colorado’s state government has been footing the bill for infrastructure repair.
The Senate compromise authorizes the Federal Highway Administration to spend $450 million repairing the damaged highways and bridges there.
Boehner Admits Defeat
(HT: National Journal)
Second Conservative Organization Opposes Senate Compromise
Conservative Organization Urges 'No' Vote On Senate Compromise
This announced plan, the details of which aren’t completely known, appears to have little to no reforms in it. There are no significant changes to ObamaCare, nothing on the other major entitlements that are racked with trillions in unfunded liabilities, and no meaningful spending cuts either. If this bill passes, Congress will kick the can down the road, yet again.
Our Congressional Scorecard for the 113th Congress provides a comprehensive rating of how well or how poorly each member of Congress supports pro-growth, free-market policies and will be distributed to our members and to the public.
Heritage’s opposition yesterday seemingly blew up an emerging House compromise. The implications of Club for Growth’s opposition aren’t yet clear.
The House Republicans Will Meet At 3:00
National Review’s Robert Costa says that the budget committee provision included in the Senate deal might make it more popular with House Republicans — since they can promise their constituents the committee-members will fight for additional spending cuts. But if Boehner does bring the bill to the floor, it will likely be approved without a majority of Republicans supporting it. This means it violates the so-called “Hastert Rule,” an informal edict among Republicans not to pass any law that requires Democratic support to pass.
The whole reason the government shut down in the first place was because Boehner refused to violate the Hastert rule. And it’s the reason no deal has been reached thus far: Boehner has remained beholden to the roughly 30-50 far-right members of Congress who oppose funding the government without making cuts to Obamacare or another government program. It’s pretty incredible that the stand-off will only end with Boehner doing something he could have done weeks ago, before his party’s poll numbers, and the country’s economy, took a major hit.
Senate Leadership Announces A Deal
Right at the same time, good news broke: Neither Sens. Ted Cruz (R-TX) nor Mike Lee (R-UT) will hold up the unanimous consent vote in the Senate which would thereby force a filibuster-type one-man delay of the bill. Both told reporters that they’ll let the bill through:
BREAKING: Sen. Mike Lee indicates he won't hold up Senate deal. "I don't have a problem with collapsing time" once he reads bill.
— Kasie Hunt (@kasie) October 16, 2013
Cruz on blocking deal: "of course not"
— Seung Min Kim (@seungminkim) October 16, 2013
Now all eyes are on the House.
Boehner Spokesperson: We Haven't Made A Decision About Senate Deal
Here's The Final Language Of The Senate's Deal
- Government funded through January 15 at sequestration levels
- Debt limit extended until February 7, subject to vote of Congressional disapproval, which Obama can veto
- 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
Also, notably, here are some of the demands that Republicans have made in the last few days, but that are NOT in the bill:
- No repeal of the “extraordinary measures” provision that allows the Treasury to do accounting tricks to avoid default
- No ‘Vitter Amendment‘ that would have taken away employer contributions from the health plans of Congressional staff
- No provisions related to birth control access
- No flexibility in how government agencies make budget cuts to their programs, as they are required to under sequestration
- No repeal or delay of the medical device tax
- No repeal or delay of the reinsurance tax
- 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 aren’t getting. It is good: It reopens the government and lifts the debt ceiling without doing any major additional damage to existing programs.
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 programs or initiatives that Democrats support. And if the previous budget conference 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 the American people 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.
Ted Cruz, Mike Lee, And The Opportunity For A Filibuster
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 told CNN this week. “I think we should go ahead and have an agreement in advance.”
But Lee and Cruz are unknowns, and Cruz has definitely hinted that he’d be willing to fight it out to the last. And lee just today indicated he would, too:
Asked if he plans to hold up a vote on a potential deal, Lee says, "I have to see what it is"
— Arlette Saenz (@ArletteSaenz) October 16, 2013
Steve King Is *Still* Not Worried About Default
“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 surged on news of a potential deal.
Boehner Plans To Bring Senate's Latest Plan To A Vote, Which Could End Shutdown And Raise Debt Limit
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 vote first on the bill 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.
Conservative Voices Bash 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. Without a united majority of 218 votes, Republicans might as well hand the Speaker’s gavel to Senate Democratic leader Harry Reid. Senate leaders announced immediately that they would resume negotiating to finish a deal that they would bring to the floor as early as Wednesday [...]
This is the quality of thinking—or lack thereof—that has afflicted many GOP conservatives from the beginning of this budget showdown. 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) echoed these comments, 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 Bloomberg News that Republicans “screwed up” and went “too far.”
RECAP: Here's What Happened Since Last Night On The Debt Limit/ Shutdown Negotiations
- 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 block the bill’s passage.
House Republicans Won't Vote Tonight
Obama Will Veto A Bill That Includes The Vitter Amendment
Here's The Proposal The House Was Supposed To Vote On Tonight
Conservative Organization Tells House Republicans To Vote Against Their Own Leadership's Proposed Deal
Despite overruling OPM’s congressional exemption, the proposed plan will do absolutely nothing to help Americans who are negatively impacted by Obamacare. 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.
Credit Downgrade On The Horizon
It looks like the same thing is happening again. This time, Fitch Ratings has placed the US on “Rating Watch Negative”:
The prolonged negotiations over raising the debt ceiling (following the episode in August 2011) risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency, 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.
The Vitter Amendment And The Deficit
There are several different iterations that have been called the “Vitter Amendment,” 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 cost the government $530 million over 10 years, the Congressional Budget Office estimates.
House GOP's Newest Plan Funds The Government For Two Months
Senate Majority Leader Harry Reid’s (D-NV) office says they’ll be standing by with a new Senate deal when the House proposal fails.
Where We Stand
On the House side: House Republican leadership has proposed a bill 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.
On the Senate side: 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.
Reporter Tells White House Spokesman He Got Insurance Through Obamacare's Exchanges
“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 Spokesperson: We Will Not 'Pay Ransom To The Tea Party'
“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 Newest (Old) Sticking Point: Birth Control
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 exempting 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.
For House Democrats And Republicans, The Answer Is No
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 don’t have the votes to get their proposal passed.
House Tea Party Demanding More Obamacare Provisions
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 ordered 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 Slams House Plan
“Let’s be clear,” Reid added, “the House Republican legislation will not pass the Senate.”
Boehner Gives Little Guidance At Press Conference
White House Rejects House Plan
Is The House Plan Constitutional?
How House Leadership Is Trying To Get Their Party On Board
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.”
House Bill May Not Get Enough Votes
Could Ted Cruz Kill The Emerging Consensus?
On Monday, Cruz hinted that he might not consent, telling Politico, “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.”
Here's Where Members Of The House Stand On The New Proposal
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 won’t bother doing what’s called a ‘whip count’ 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.
House May Leave DC After It Passes Its Bill
Hearing House may pass its bill and then skip town.
— Ramesh Ponnuru (@RameshPonnuru) October 15, 2013
About The Extraordinary Measures Provision
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. So technically, we hit the legal debt ceiling of $16.699 trillion way back on May 19, even though Oct. 17 is the D-Day that the Treasury has identified as when the debt ceiling needs to be raised if the nation is to meet its financial obligations.
Eliminating these accounting tricks (the full list is here) 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 for decades, under both Republican and Democratic administrations.
When removing extraordinary measures was originally floated last week, House Minority Leader Nancy Pelosi (D-CA) said of the proposal, “It certainly isn’t very smart.”
The Emerging House Deal
- 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
- Ending the ability of the treasury to take ‘extraordinary measures‘ to avoid default in the future
More On The Reinsurance Tax
On The Reinsurance Tax
Tea Party Republicans Say No
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 one leading Tea Party congressman calls a “mushy piece of s—t.” Another House conservative warns, “If Boehner backs this, as is, he’s in trouble.”
This is bad news, since House Speaker John Boehner (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.”
The Senate's Proposal
- 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
- A reinsurance tax that is part of Obamacare would be delayed
- Recipients of subsidies for their insurance under the exchanges established by Obamacare would be subject to income verification