The fiscal showdown in Washington entered its final stages as the House and Senate prepared competing plans that would end the 15-day-old government shutdown and prevent the U.S. from missing promised payments.
Both plans would fund the government through Jan. 15, 2014 and suspend the U.S. debt limit until Feb. 7. As the differences narrow between the parties, the House vote will show whether Republicans are willing to raise borrowing authority and end the shutdown without major changes to the 2010 health-care law.
“It moves the ball forward,” Representative Charlie Dent, a Pennsylvania Republican, said today after meeting with party leaders.
The House proposal goes beyond the Senate with two smaller changes to the health care law. It would delay for two years a medical-device tax and prevent the government from contributing to the health insurance of members of Congress, the president, the vice president and the Cabinet.
The House plan falls far short of Republican efforts last month to defund or delay major pieces of the 2010 health law. Speaker John Boehner told Republicans today the approach was the chamber’s only possible strategy to respond to the emerging Senate deal that he described as a hand grenade being lobbed at the House, said two lawmakers who spoke on condition of anonymity to discuss the private meeting.
White House spokeswoman Amy Brundage in a statement today said Obama has repeatedly said that lawmakers “don’t get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nation’s bills,” saying that’s what the House Republican proposal does.
There are obstacles, including the disagreements between the Senate and the House. Additionally, some House Republicans may oppose Boehner’s plan because it doesn’t go far enough in changing the health law. Furthermore, senators opposed to the deal may stall a final vote.
The emerging contours of an agreement would stave off a potential default, open shuttered federal services and change the immediate deadlines in favor of three new ones over the next four months, including a Dec. 13 target date for a budget conference between the House and Senate.
“There are productive conversations going on with the Republican leader,” Senate Majority Leader Harry Reid said today on the Senate floor, adding that he was “confident” a comprehensive deal could be reached this week to avoid a “catastrophic default.”
Reid has been working with Senate Minority Leader Mitch McConnell of Kentucky.
U.S. lawmakers, who have governed from fiscal crisis to fiscal crisis for more than two years, may be setting up more crises in the near future. The agreement would delay the next major deadline -- the Jan. 15 lapse in government funding -- until after the holiday shopping season.
Benchmark Treasury 10-year yields rose two basis points, or 0.02%age point, to 2.71% at 10:48 a.m. New York time, according to Bloomberg Bond Trader prices. The rate touched 2.74%, the highest since Sept. 23.
The Stoxx Europe 600 Index gained 0.7% at 9:20 a.m. in New York in the longest winning streak in two months. The Standard & Poor’s 500 Index fell 0.3% to 1,705.56 at 11:06 a.m.
There is a potential obstacle to a Senate agreement. A single senator would be able to use procedural tactics to push a final vote past the Oct. 17 lapse in borrowing authority.
If the House votes tonight, the Senate would be able to pass its plan no later than Oct. 18, before the government starts missing promised payments. The U.S. will have enough cash and income revenue to avoid missing payments until Oct. 22 at the earliest, according to the Congressional Budget Office.
Texas Republican Senator Ted Cruz, who spoke for more than 21 hours during a budget debate last month, wouldn’t rule out stalling maneuvers, saying he wants to see the details of the plan.
The House Republican alternative would prevent the government from making any employer-side contribution to the health insurance of members of Congress, the president, the vice president and the cabinet.
Obama has insisted that Congress raise the $16.7 trillion U.S. debt limit without add-ons and that stopgap spending bills be free of policy conditions.
The emerging Senate agreement again put pressure on Boehner, who has a 232-200 Republican majority. He may have to decide whether to side with hardliners insistent on changes to Obamacare or rely on Democratic votes to pass a bipartisan Senate plan through the House.
Reid and McConnell may release their plan’s details as early as today, after conversations that started over the weekend. Democrats want as long a debt-limit increase as possible and as short a government funding extension at Republican-preferred levels. Republicans want the opposite.
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