Shutdown: Day Two

Photograph by Brendan Smialowski/AFP via Getty Images

A view of a closed Senate cafeteria at the US Capitol on October 1, 2013 in Washington.

Updated at 9:17, 9:27, 11:03, 11:26, 11:47 am, 2:14, 2:47,  3:11 and 4:13 pm EDT
With Lisa Lerer reporting from the White House and Sam Kussin-Shoptaw the Senate

“I’m pretty well known for being a calm guy,” President Barack Obama said today in an interview aired by CNBC. “Sometimes people think I’m too calm.”

Asked about the budget stalemate in Washington that has partially shut down the government, the president said: “Am I exasperated? Of course I’m exasperated, because this is entirely unnecessary.”

A majority of the House would support a “clean” spending bill to reopen the government, he said — meaning one lacking restrictions on the Affordable Care Act, also known as “Obama-care”, that House Republicans insist upon including.

“I’m prepared to negotiate on anything,” he said — anything but Obama-care.  He maintains that he has “bent over backwards” to negotiate with Republicans, who accuse him of not negotiating at all.

The president and congressional leaders planned a meeting later today.

In a town where Senate Democratic leaders have ridiculed House Republicans blocking a budget deal as “terrorists,” Obama also said he has “purposely” kept his rhetoric down.

 

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They could be at this a while.

The prospects for an immediate solution to the budget stalemate that thrust the government into a partial shutdown are not great.

Couple that with the fact that an even bigger challenge looms: Raising the federal debt limit sometime later in the month — with Oct. 17 standing as a target date for now.

That’s two weeks of furlough for 800,000 federal workers who showed up for work yesterday morning, put messages on their voice mails and were ordered not to touch their email until they return to work — with an uncertain promise of back pay when they do.

Yet the president’s health care program — the target of House Republicans heading into the budget showdown — is open for business.

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There hasn’t been a lot of direct negotiation between the president and congressional leaders.

The White House has invited congressional leaders to a meeting with the president today — yet the president will be pressing the same case that he has been from the start.

Senate Majority Leader Harry Reid, Republican Leader Mitch McConnell, House Speaker John Boehner and Democratic Leader Harry Reid have been called in.

President Barack Obama will be urging the House to pass a “clean” spending resolution financing the government — which is what he has been seeking all along, and which is what the Senate has approved.

The House’s leaders are insisting on attaching concessions to that resolution — concessions limiting the president’s health-care program. They are looking for some give-and-take today.

“We’re pleased the president finally recognizes that his refusal to negotiate is indefensible,” Boehner spokesman Brendan Buck said in a statement. “It’s unclear why we’d be having this meeting if it’s not meant to be a start to serious talks between the two parties.”

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The question for the White House is when Republican sentiment for a “clean” budget deal will reach a critical level.

Rep. Scott Rigell, a Virginia Republican, said on Bloomberg Television that “at least 15”  House Republicans will support a clean budget and “that number will grow.”

If all the House’s Democrats supported it, they’d need 17 Republicans — if Boehner were ever to allow a vote lacking the support of his own caucus.

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Lawmakers asking for a straight-up vote on a “clean” budget have a hashtag:

#DemandAVote

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As the blame game in the Senate carries on, Budget Chairman Patty Murray took to the floor with a lesson plan outlining what lawmakers need to remember as they attempt to pass a continuing resolution.

 The Washington Democrat, a former preschool teacher, laid into her colleagues and their inability to bridge differences to re-open the government.

“I’m using my skills as a preschool teacher right now,” she said. “I think all of our colleagues could learn a lot from those kinds of skills.”

She imparted age-old rules: “No bullying, it’s my turn to talk, being reasonable… play well in the sandbox.”

Democrats have called Tea Party forces terrorists and claimed Republicans are holding the government hostage in order to win concessions on health care. Murray explained the conflict through a much more elementary viewpoint.

She is worried that children across the nation will emulate the behavior of Republicans whom she described as though they are a group of pouty pre-schoolers grumbling, “If I don’t get my way right now, about a bill that I fought against and voted against and an election was run and won on, but I lost. I’m so mad that I’m not going to let you have anything else because I’m just so entrenched in that.”

“We have a country that is counting on us to be responsible adults.”

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The House’s Republican leaders prepared to take another shot today at bills financing limited — and the most popular — parts of the government: National Parks, Veterans Affairs and the like — adding the National Institutes of Health.

These moves failed for the lack of an extraordinary vote needed under the rules yesterday, and they will look today for simply majority votes. Yet the same threat stands today that stood yesterday: The White House promises to veto any of this.

“Consideration of appropriations bills in a piecemeal fashion is not a serious or responsible way to run the United States Government,” the Office of Management and Budget said today in a statement issued. “Instead of opening up a few Government functions, the House of Representatives should re-open all of the Government.  The harmful impacts of a shutdown extend across Government, affecting services that are critical to small businesses, women, children, seniors, and others across the Nation.”

The House, the White House says, should take a “straight up or down vote” on a budget without political agendas attached to it, as the Senate has.

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A lineup of House Republicans testified outside the Capitol today about constituents who have come to Washington to see its war memorials, only to be shut out because of the government shut down.

This preceded a House vote to fund the National Parks, one of the pieces of the budget Republicans want to approve for lack of an overall budget agreement.

House Majority Leader Eric Cantor was asked: How about day-care centers that have been closed by the shutdown?

“That is coming as well,” said Cantor, of Virginia. “We are going to take every issue that is out there that we have agreement on.

“All of us realize there is a lot of pain in this shutdown,” he said, noting employees who have been furloughed. “We are looking to reopen this government so we can see federal employees return to their jobs.”


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Another sign that no immediate solution is at hand:

The president will cut short his planned trip to Asia next week, canceling stops in Malaysia and the Philippines because of the partial shutdown, Bloomberg’s Margaret Talev and Julianna Goldman report. Leaving this weekend for international conferences, he will attend the Asia-Pacific Economic Cooperation in Bali, Indonesia.

Obama called Prime Minister Najib Razak of Malaysia to say that “due to the government shutdown, he will not be able to go forward with his planned travel to Malaysia,” the White House said in a statement today.

Obama promised that he would visit Malaysia later in his term and said he is sending Secretary of State John Kerry to head the U.S. delegation to a conference on entrepreneurship in Kuala Lumpur. Kerry will be accompanied by Commerce Secretary Penny Pritzker and U.S. Trade Representative Michael Froman. Kerry also will go to Manila.

* * *

At the National Zoo, the “Panda Cam” has gone dark.

The asteroid watch is on hold.

See the Bloomberg.com slide-show by Amelia Hennighausen and Eric Roston on what else is missing from an arsenal of government duties never appreciated so much as when they are gone.

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“The partisan battles over the U.S. government shutdown and a potential debt default are beginning to merge into a single fiscal fight, raising the stakes for Republicans and Democrats to end the impasse,” Bloomberg’s Mike Dorning reports today.

“With no immediate progress on resolving the federal closure, the standoff over funding the government is increasingly likely to continue as a deadline closes in to raise the debt limit. Treasury Secretary Jacob J. Lew yesterday repeated the warning that the U.S. will exhaust its borrowing authority on Oct. 17, in a letter to House Speaker John Boehner.”

“It is unlikely this shutdown will be resolved this week,” said former congressman Tom Reynolds, who headed the House Republicans’ national campaign apparatus and remains in close touch with many members through his current work as a lobbyist. “The question is whether it will be resolved next week. Either takes us close to Oct. 17.” Each side has reason to believe the debt limit provides more leverage, Dorning explains.

“Republicans can argue that President Barack Obama fears a default more than a shutdown, and the White House can use the prospect of a default to portray Republicans as irresponsible and bring pressure on them through party allies in the business world.”

 

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Day One of the first shutdown since 1996 came and went with no talks scheduled between the White House and Congress, Bloomberg’s Richard Rubin, Kathleen Hunter and Roxana Tiron note, “making it more likely the standoff would merge with the fight over raising the U.S. debt limit later this month to make sure the government can pay all its bills.”

 “You have to now let this play out,” said Rep. Devin Nunes, a California Republican who has been criticizing his party’s hard-liners for dictating its strategy. “We’re this far, so you have to let it play out.”

Market reaction was muted yesterday, as up to 800,000 federal workers were sent home with no paychecks and parks and other services were shuttered across the country. U.S. stocks rose, after the Standard & Poor’s 500 Index (SPX) had fallen Sept. 30 to a three-week low, as investors speculated that the economic effects of the partial government shutdown would be limited. House Republicans have suggested ways out of the impasse, flinging proposals at the Democrats and seeking to engage the Senate and Obama in direct talks.

The president has maintained that he will not negotiate over the Republicans’ singular demand: Curtailing the signature health-care program that he won in 2010, the Affordable Care Act offering insurance to millions of Americans who lack it. The law’s health exchanges for people seeking insurance opened yesterday, the first day of the shutdown, to strong demand. And, Obama says, he will not negotiate over the debt limit.

“The president isn’t telling the whole story when it comes to the government shutdown,” House Speaker John Boehner, anOhio Republican, wrote in USA Today. “The fact is that Washington Democrats have slammed the door on reopening the government by refusing to engage in bipartisan talks.”

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As the government partially shut down, the Affordable Care Act’s health exchanges opened for enrollment — the program largely financed by mandatory federal spending.

Obamacare’s opening day drew millions of consumers to the law’s core insurance exchanges, offering supporters and investors confidence that if the websites can stay up and running, customers will follow, as Bloomberg’s Alex Nussbaum reports. In New York, officials said their exchange had 2.5 million visitors in its first half hour. California reported as many as 16,000 hits a second. And U.S. officials recorded 2.8 million visitors to the federal website, healthcare.gov, even as it fought technical problems much of the day.”

“The difficulties with the online insurance marketplaces gave new ammunition to Republicans who say the Affordable Care Act doesn’t work. Obama countered that the volume gives “a sense of how important this is to millions of Americans,” and administration officials said marketing of the exchanges will now start to pick up steam.

“Anything short of a calamity on day one is a victory,” said Dan Mendelson, chief executive officer of Washington-based consultant Avalere Health LLC. “It’s all about message and repetition, and making sure it’s accessible.”

While the federal site, which serves 36 states, was inaccessible for much of the day, administrators “added capacity and made adjustments” to put it back into service by late afternoon, Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services, told reporters. She declined to say how many people enrolled in health plans through the site.

“Like every new law, every new product rollout, there are going to be some glitches in the sign-up process along the way that we will fix,” Obama said yesterday at a White House event where he brought people who stand to benefit from the program to a Rose Garden appearance to tout the law and call on Congress to get on with its budgetary business.

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The government has started using final extraordinary measures to avoid a breach of the nation’s debt limit, Treasury Secretary Jack Lew said as he pressed Congress to increase borrowing authority “immediately.”

Lew, in a letter addressed to Speaker Boehner dated yesterday, repeated that the measures will be exhausted no later than Oct. 17, as Bloomberg’s Kasia Kliaminska reports.

When that happens, “we will be left to meet our country’s commitments at that time with only approximately $30 billion,” he said, “far short of net expenditures on certain days, which can be as high as $60 billion.”

Lew and Obama have said they won’t negotiate on the limit, which is tied to obligations the U.S. has already incurred. Boehner, an Ohio Republican, has issued a list of demands before he’ll support raising the ceiling. His conditions include approval of TransCanada Corp. (TRP)’s Keystone XL pipeline, major revisions to the tax code and a one-year delay of the insurance mandate in the Obama health-care law.

Pacific Investment Management Co.’s Bill Gross expecst that the U.S. will avoid a “catastrophic” default on Treasury securities.

“The U.S. Treasury is the center of the global financial complex,” Gross, manager of the world’s biggest bond fund, said during a Bloomberg Television interview with Trish Regan and Adam Johnson. A default would be “unimaginable,” as it would have “catastrophic” consequences on U.S. borrowing costs, and would trigger a “complex series of events worldwide” that would ripple through global financial markets, he said.

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As a Buddhist monk, Ashon Nyanuttara suppresses anger and frustration.Even so, he says he was disappointed on arriving in New York’s Battery Park yesterday only to learn that Statue of Liberty tours were canceled, as Bloomberg’s Jim Snyder, Priya Anand and Angela Greiling Keane report.

“This is no good for public, especially tourists,” said Nyanuttara, 30, who is visiting from Myanmar, or Burma. “This is an American symbol. The government should keep it open.”

 National parks such as Liberty Island were closed in the first U.S. government shutdown in 17 years after the Republican-led House and the Democratic-run Senate couldn’t agree on spending bills before the fiscal year began yesterday

The closures upended tourists’ plans and forced about 800,000 federal workers to take unpaid time off until the impasse is resolved. The partial shutdown will cost the nation at least $300 million a day in lost output, according to IHS Inc. (IHS)analysts. Employees came to work to secure files, post closed signs on doors and change voice-mail messages to inform callers they wouldn’t be available until further notice.

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