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Congress Looks for Elusive Path Out of Government Shutdown

October 7, 2013
capitol night
  

Though Republican lawmakers and President Barack Obama say they want to end the shutdown quickly, there’s no sign they’re talking to each other.

The way out of the political morass in Congress remains elusive as the U.S. enters the second week of a partial government shutdown and with a potential lapse in U.S. borrowing authority just 10 days away.

Though Republican lawmakers and President Barack Obama say they want to end the government shutdown quickly and avoid a historic default, there’s no sign they’re talking to each other and their demands are mutually exclusive.

The standoff, heightened by Obama’s refusal to negotiate on measures needed to keep the government solvent and running and House Republicans’ demand for a delay in the president’s signature health-care plan, means at least one side must make a concession or find a way to describe a concession as a victory.

"I don’t know what the path out this time is," said Martin Frost, a former Democratic congressman from Texas, a veteran of the last partial government shutdown in 1996.

At least three possible routes include a resolution, based on previous deadlocks: the Senate jam, in which that chamber forces the House to accept a bipartisan compromise; the complete cave, where one party buckles under public pressure; and the fig leaf, where one side accepts a partial defeat while claiming a symbolic victory.

"There is a path out of everything," said Representative Lynn Westmoreland, a Georgia Republican. "You just got to find it."

Many parts of the government were shuttered Oct. 1 after Republicans insisted on linking funding authority to changes in the Affordable Care Act that Obama has said he won’t accept.

 

Debt Ceiling

 

The Standard & Poor’s 500 Index fell 0.8 percent at 9:32 a.m. in New York. Treasuries rose, with the benchmark 10-year yield falling four basis points, or 0.04 percentage points, to 2.61 percent at 8:40 a.m. in New York, according to Bloomberg Bond Trader prices.

The shutdown has become intertwined with the need to raise the $16.7 trillion debt ceiling. The U.S. will run out of borrowing authority Oct. 17, according to the Treasury Department, and cash reserves will run dry between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

Because of the partial shutdown, the U.S. has furloughed about 800,000 workers while others in critical jobs worked without immediate pay. The government shuttered national parks, closed Internal Revenue Service call centers and delayed the release of unemployment data. Some U.S. services, including Social Security benefits, continue.

 

Senate Jam

 

While both parties plot their strategies behind the scenes, the possible paths to a resolution are becoming more evident -- in part because they’ve happened before.

The Senate jam played out at the last fiscal deadline, the combination of expiring tax cuts and scheduled spending reductions at the end of 2012.

Then, Senate Minority Leader Mitch McConnell and Vice President Joe Biden decided which taxpayers would have higher burdens and the Republican-controlled House accepted with only a minority of Republicans voting yes.

This time around, on the debt limit, House Speaker John Boehner faces the risk of a replay.

Just last month, Republicans rallied behind a bill that defunded the health law, as urged by Republican Senator Ted Cruz. It passed the House and then Senate Democrats and some Republicans agreed to cut off debate on a 79-19 vote, leading to a party-line vote to strip out the Obamacare defunding.

 

Clock Ticking

 

Repeat that bipartisan pathway on the debt ceiling, and Boehner could be left with a debt-limit increase, none of the policy conditions he wants and the clock ticking toward a default he’s already said he won’t allow. The speaker’s big decision, as the person who controls the House floor, would be whether to allow a vote.

"‘When you get close to that deadline, you’re really playing with fire," said Senator Charles Schumer, a New York Democrat. "It’s not like the government shutdown."

That prospect of changing a House proposal might be the reason that Senate Majority Leader Harry Reid hasn’t started what could be a week-long process of getting a debt-limit bill without conditions ready for a final Senate vote.

To advance his bill -- as opposed to ending debate on a House bill full of Republican priorities -- Reid probably would have to overcome procedural hurdles requiring 60 votes. That means he would need the support of six Republicans and might have to make policy concessions to get their votes.

Even then, the strength of a bipartisan consensus in the Senate could force Boehner’s hand and cause him to accept a deal engineered by Reid.

 

Caving In

 

The second potential path is the complete cave, where one party yields to public pressure. That’s what both parties are trying for now as the standoff continues.

Republicans say they think they can move Obama off his no- negotiations stance in two ways. First, they’re passing separate bills to fund parts of the government, trying to force Democrats to choose between programs they champion, such as national parks and infant nutrition, and the president’s insistence that the entire government be opened.

Republicans have had some success in this effort, getting some House Democrats to join them in voting for the measures.

"We are not going to pass a clean debt limit," Boehner said yesterday in an interview on ABC’s "This Week" program. "The votes are not in the House to pass a clean debt limit."

Second, Republicans are pointing out flaws in the Affordable Care Act, also known as Obamacare, as they insist on changes to the law as a condition of ending the shutdown. They’ve been bolstered by the computer problems that hampered the rollout of the insurance exchanges last week.

 

Entitlement Programs

 

For Obama, caving would mean accepting health-law changes and engaging in the kinds of negotiations on entitlement programs he entered with Boehner in 2011 during the previous debt-ceiling fight.

"It’s about a broader agreement, not just about Obamacare, but the debt ceiling and the issues facing our nation," said Representative Dave Camp, a Michigan Republican and chairman of the House Ways and Means Committee. "Are there areas that are critical to the nation that we need to agree on now and can that begin a path toward a common understanding of what we need to do to move ahead?"

So far, Obama hasn’t budged, insisting that avoiding default and reopening the government aren’t concessions to him because everyone wants them.

Instead, Democrats have been applying their own pressure to get Republicans to cave, particularly on ending the shutdown.

 

Lew’s Warning

 

U.S. Treasury Secretary Jacob J. Lew, who appeared yesterday on four of the major Sunday television talk shows, said the administration would be willing to negotiate only after the partial shutdown ends and the debt ceiling is increased. He also warned of the dangers of default, as well as the possibility that Congress may fail to pass an increase.

"I’ve talked with John Boehner; I know he doesn’t want to default," Lew said on "Fox News Sunday." "He also didn’t want to shut the government down. And here we are with a government shutdown."

Democrats also point to the at least 20 Republicans who have said they would vote for a bill to open the government without policy conditions related to the health law.

That, Obama said Oct. 4, is the "only way out."

 

Fig Leaf

 

One other possibility is the fig leaf, in which both parties make concessions and declare victory, even without a negotiated deal that resolves major fiscal disputes.

Republicans aren’t sure what they can get, said Representative Dennis Ross, a Florida Republican.

"When you have a Senate under Harry Reid that has now dug its heels into the ground and said we will not negotiate and a president who says he will not negotiate, what are we supposed to do?" Ross said.

Frost said he saw room for fiscal agreements such as a timeline for tax code changes -- as long as they weren’t negotiated against the shutdown or the risk of default.

Boehner"has to tell the crazies in his caucus to sit down and shut up," Frost said. After that, "I don’t accept the proposition that the president couldn’t work things out."

 

Party Priorities

 

Boehner has been trying to package the debt limit with as many party priorities as possible, including TransCanada Corp.’s Keystone XL pipeline, limits on environmental regulations and cuts to entitlement programs.

Representative Paul Ryan, a Wisconsin Republican and his party’s 2012 vice presidential candidate, is pressing for a plan that would resolve the spending impasse and raise the debt limit while extracting entitlement program cuts and making changes to economic policies, according to a leadership aide who asked not to be identified because plans aren’t official.

For Boehner, achieving any of those would mark a significant victory because Obama and Senate Democrats have blocked them for years.

Reid, turning up the pressure on Boehner, said last week that he didn’t want to give the speaker a face-saving way out.

"This isn’t a date to the prom," he said. "This is our country."

 

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