Apr 24, 2014
Sign UpLogin

Senate Leaders Say They’re Optimistic on U.S. Debt-Cap Accord

October 14, 2013

(For more on the fiscal impasse, see EXT2.)

 

Oct. 14 (Bloomberg) -- U.S. Senate Democratic and Republican leaders said they are optimistic about ending a partial government shutdown and preventing the nation from breaching the debt ceiling in three days.

"I’m very optimistic that we will reach an agreement that’s reasonable in nature this week," Majority Leader Harry Reid, a Nevada Democrat, said on the Senate floor today following talks with Minority Leader Mitch McConnell of Kentucky. McConnell said he shares Reid’s optimism.

The movement toward a deal in the Senate today marked the strongest signals yet that Congress may be able to increase U.S. borrowing authority before it lapses Oct. 17 and end the shutdown that started Oct. 1. Any proposal could face procedural delays in the Senate and an uncertain path in the Republican- controlled House, where Speaker John Boehner would have to decide whether to allow a vote or make changes.

Reid, McConnell, Boehner and House Minority Leader Nancy Pelosi will meet with President Barack Obama at the White House at 3 p.m.

If Congress does nothing, the federal government would start missing payments sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

"It’s not put together until it’s put together," said Senator Max Baucus, a Montana Democrat. "But I am quite confident it will be put together before the debt limit is reached and before things start to go haywire."

 

Stocks Advance

 

U.S. stocks trimmed earlier declines amid signs of progress on an accord.

The Standard & Poor’s 500 Index advanced 0.3 percent to 1,708.35 at 2:25 p.m. in New York while the Stoxx Europe 600 Index reversed earlier declines and added 0.2 percent at the close.

The U.S. cash bond market is closed for Columbus Day. Gold gained 0.9 percent and natural gas jumped to the highest level in almost four months.

In the House, Republican leaders are weighing whether to bring up their plans for a short-term debt limit increase, said two aides who spoke on condition of anonymity to discuss strategy.

House Republicans will meet at 9 a.m. tomorrow to discuss the details of that proposal, which is expected to include policy conditions that Obama says he can’t accept.

 

Senate Plan

 

A Reid-McConnell deal won’t be reached until at least after the White House meeting this afternoon, said a Senate Democratic aide who spoke on condition of anonymity to discuss the private talks.

The leaders are debating the length of a stopgap spending bill and debt limit increase, the aide said. Democrats want a longer debt-limit increase and a shorter spending bill at Republican-preferred levels. Republicans want the reverse, the aide said.

There is little if any discussion of major changes to the 2010 health care law. House Republicans’ demands for those changes, such as a delay in the mandate for individuals to purchase health insurance, led to the shutdown 14 days ago.

Obama has insisted that no policy conditions be attached to a spending bill or debt-limit increase.

Republicans are still trying to include delay of an excise tax on medical devices and language requiring income verification for people receiving health-insurance subsidies, the aide said. Democrats want specific concessions if they agree to either of those items, the aide said.

 

‘Bipartisan Way’

 

"Things are back in the middle of the road on the Senate side," Senator Bob Corker, a Tennessee Republican, told reporters in Washington. "There’s an opportunity today to bring that to a conclusion and to begin moving something off the Senate floor in a bipartisan way."

The congressional deadlock over increasing the U.S. debt ceiling from $16.7 trillion is threatening the U.S. and world economies, International Monetary Fund Managing Director Christine Lagarde said yesterday in Washington.

"This week, if we don’t start making some real progress both in the House and the Senate, and if Republicans aren’t willing to set aside some of their partisan concerns in order to do what is right for the country, then we stand a good chance of defaulting," Obama said.

The Senate negotiations include discussions of easing the spending caps imposed by across-the-board cuts known as sequestration. Richard Durbin of Illinois, the second-ranking Democrat in the Senate, said there is a $70 billion spending gap between Democrats and Republicans.

 

Spending Levels

 

Democrats don’t want to lock in lower spending levels for most of the 2014 fiscal year, which began Oct. 1. They have been willing to accept the lower numbers through Nov. 15.

Disagreement over spending is the big sticking point, said Jim Manley, a former aide to Reid. Manley, in a telephone interview, said he’s watching "to see if Senator McConnell demands some sort of fig leaf from Senator Reid to protect the speaker or whether he’s prepared to throw him overboard to get this all behind him."

Representative Tim Huelskamp, a Kansas Republican, played down the importance of the deadline and said the White House "is trying to scare the markets."

"Oct. 17 is a date that won’t have a major impact unless the White House can create concern about that," Huelskamp said yesterday on CBS’s "Face the Nation."

A Senate deal probably would face the prospect of a hostile reception from House Republicans still seeking to curtail Obamacare and opposed to easing spending caps.

Republican strategist Ron Bonjean yesterday described the latest efforts to find a way out of the impasse as "a Rubik’s Cube from hell," adding that even if the Senate passes a plan, it would be "still pretty much a jump ball in the House."

"They may simply reject it without offering a Plan B," Bonjean, a one-time aide to former Republican Speaker Dennis Hastert, said in a telephone interview.

 

--With assistance from Sandrine Rastello, Cotten Timberlake, Lisa Lerer, Laura Litvan, Michael C. Bender, Terry Atlas, Roxana Tiron, Mike Dorning and James Rowley in Washington, Sara Eisen in New York and Aki Ito in San Francisco. Editors: Jodi Schneider, Steve Geimann

 

To contact the reporters on this story: Richard Rubin in Washington at rrubin12@bloomberg.net; Kathleen Hunter in Washington at khunter9@bloomberg.net; Chris Strohm in Washington at cstrohm1@bloomberg.net

 

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

 

See Comments

RELATED TOPICS: Power Hour - Business

 
Log In or Sign Up to comment

COMMENTS

No comments have been posted



Name:

Comments:

Hot Links & Cool Tools

    •  
    •  
    •  
    •  
    •  
    •  

facebook twitter youtube View More>>
 
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions