Shutdown Journal: Week One

Photograph by Jewel Samad/AFP via Getty Images

A closure sign is posted on the national mall near the Capitol in Washington, DC, on October 3, 2013.

Updated Oct. 6  at 9:50 am and 12:34 pm EDT

On the first Sunday of the partial government shutdown, think of the talk shows as quote machines.

With some ominous quotes at that:

 

Because there just isn’t much real talking going on outside the studios:

Though there is plenty of finger-pointing:

And Tea Party posture:

In a stalemate the Democrats portray in hostage terms:

With the Obama administration warning of the consequences of failure:

* * *

 Speaker John Boehner said the House can’t pass an increase to the U.S. debt ceiling without packaging it with other provisions — a nonstarter for President Barack Obama, Bloomberg’s Phil Mattingly reports from the morning shows.

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

The Obama administration has said it won’t negotiate with Republicans over funding the government or raising the debt ceiling, arguing that it is part of the basic functions of Congress and shouldn’t be used as point of leverage. Obama, in an interview with the Associated Press, said he expects Congress will reach an agreement to raise the nation’s $16.7 trillion debt limit in time to avert a default.

 “The nation’s credit is at risk because of the administration’s refusal to sit down and have a conversation,” Boehner said. Asked if he’d consider putting a clean debt ceiling increase on the floor, Boehner said the House would not be “going down that path.”

* * * 

Treasury Secretary Jack Lew said Congress needs to pass a debt-ceiling increase by Oct. 17 or the U.S. will be “dangerously low” on cash and risk defaulting on its payments,  Bloomberg’s Kasia Klimasinski and Ian Katz report from the shows.

“On the 17th, we run out of our ability to borrow, and Congress is playing with fire,” Lew said on CNN’s “State of the Union” today. “If they don’t extend the debt limit, we have a very, very short window of time before those scenarios start to be played out.”

“If the United States government, for the first time in its history, chooses not to pay its bills on time, we will be in default,” Lew said. “There is no option that prevents us from being in default if we don’t have enough cash to pay our bills.”

* * *

Secretary of Defense Chuck Hagel said Saturday that the Defense Department will be able to call back most of the civilian employees furloughed this week, based on a legal reading of the one law Congress approved and the president signed before the partial-shutdown: legislation authorizing the payment of the military during the impasse.

The Pentagon put about 400,000 employees on leave, idling about half of its worldwide civilian workforce, Bloomberg’s Tony Capaccio and Bill Selway report.  They account for about half of the 800,000 federal workers put on leave this week, during the first partial government shutdown since 1996. Hagel said in a statement that the law ensuring that service members are paid on time during the shutdown permits the military to call back employees responsible for the “morale, well-being, capabilities and readiness of service members.”

Attorneys for the Defense and Justice Departments concluded that the law allows for the recall of some, though not all, civilian employees, the secretary said. “I expect us to be able to significantly reduce — but not eliminate — civilian furloughs under this process,” Hagel said. “Employees can expect to hear more information from their managers starting this weekend.”

* * *

The rest of the workers furloughed are likely to see back pay whenever they return to work, as the House voted unanimously Saturday to authorize that, Bloomberg’s Michael Bender reports.

The Senate was likely to support that and the White House concurs. The measure, which passed 407-0 today, was part of an effort to “ease the pain” of the first shutdown since 1996, said House Majority Leader Eric Cantor of Virginia. He and fellow Republican leaders called on President Barack Obama and Democrats in the Senate to negotiate on a spending deal.

“He is here this weekend, we are here this weekend,” Rep. Kevin McCarthy of California, the No. 3 Republican in the House, told reporters today. “This can all end.”

* * *

The White House, unofficially, suggests tacos as an ice-breaker:

* * *

On the first Sunday of the shutdown, House Speaker John Boehner of Ohio was suiting up for an appearance on a morning talk show, as Treasury Secretary Jack Lew takes on the rest of the talk shows for the administration.

* * *

The first Saturday of the shutdown:

“Much of the government” of the United States is closed,  the White House says, because Congress “did not fulfill its responsibility” at the start of the new fiscal year Oct. 1 and adopt a continuing budget resolution.

The Republican-run House refused to adopt the budget the Democratic-led Senate approved for lack of a brake on the Affordable Care Act, the president’s signature health-care law, which also kicked into gear on Oct. 1 with the opening of health insurance exchanges. The Senate refused to adopt the House’s proposed budgets defunding, delaying or declawing “Obama-care.”

As a result, many of the government’s Web-sites are inaccessible to people and businesses seeking information. The Department of Labor, its Bureau of Labor Statistics largely on furlough, could not deliver the monthly report of unemployment and joblessness. Some of the White House’s own Web-site is inaccessible. Though the president’s weekly address is live:

“There’s only one way out of this reckless and dangerous shutdown,” Obama says in his address, blaming the “far right wing of the Republican” party for “holding our democracy (and) economy hostage” over its opposition to Obama-care. “I won’t pay a ransom in exchange for reopening the government.”

* * *

Sen. John Cornyn of Texas says “Republicans are eager to end the shutdown and move ahead.” In the Republican Party’s weekly address, he says in negotiations “each party gets a little and gives up a little.” Yet the Senate has rejected a one-year delay in the mandate for individual insurance in the health-care law even though Obama has delayed the mandate that large employers provide insurance for a year.

“Apparently they think the government shutdown is good politics, and they are in no hurry to end the stalemate,” Cornyn says. “The Obama-Reid shutdown,” he says, is all about politics — a dangerous and “cynical game.”

* * *

Our man Michael Bender has found the first openings in the Tea Party’s barricade.

First came his exclusive report on Rep. Dennis Ross Friday and Saturday word that Reps. Blake Farenthold and Doug Lamborn also are relenting in the party’s resistance to a deal.

“The first cracks are appearing in the Tea Party’s push to dismantle the nation’s health law as three House lawmakers with ties to the movement said they’d back a U.S. spending deal that doesn’t center on ending Obamacare,” Bender reported. `1Republican Representatives Farenthold of Texas, Lamborn of Colorado and Ross of Florida, all of whom identify with the Tea Party, said they’d back an agreement to end the government shutdown and lift the debt ceiling if it included major revisions to U.S. tax law, significant changes to Medicare and Social Security and other policy changes.”

“The president seems unwilling to give an inch on Obamacare, so, all right, where can we find other reforms?” Farenthold said in an interview at the Capitol today just after a vote on giving furloughed workers retroactive pay. “If we can make the same or bigger difference doing something other than Obamacare, I don’t see why we wouldn’t do it.”

* * *

Ross, a Florida Republican, first said Friday that he’d support a broad spending deal that didn’t include changes in President Barack Obama’s health-care law, becoming the first Tea Party-backed House lawmaker to publicly back off the fight that’s partially shut down the government for four days.

“Ross, ranked among the House’s most conservative members by both the Club for Growth and the American Conservative Union, said he’s shifted his position because the shutdown hasn’t resulted in changes to the Affordable Care Act, which started Oct. 1, the same day government funding ran out. The shutdown also could hurt the party, he said.

“We’ve lost the CR battle,” Ross, referring to the continuing resolution to authorize government spending, said in an interview. “We need to move on and take whatever we can find in the debt limit.”

“Other lawmakers backed by the limited-government Tea Party movement, including Republican Reps Jim Jordan and Mark Matthews, are refusing to budge, Bender reports. “Republican House Speaker John Boehner said today the way to end the government shutdown would be for Democrats to negotiate and accept changes that would produce “fairness” under President Barack Obama’s signature health-care law, also known as Obama-care.

* * *

Jordan, a leading member of the U.S. House’s conservative caucus, says changes to the health-care law must be part of any budget deal to end the government shutdown.

“We have to get something on Obamacare,” the Ohio Republican said in an interview for Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Bloomberg’s David Lerman reports: “That stance, which Obama and congressional Democrats say is a nonstarter, has stymied talks to produce a stopgap spending measure that would restore government services. It also risks undermining efforts to raise the federal debt ceiling, which will reach its limit by Oct. 17.”

“I don’t plan to support anything that doesn’t address the underlying problem,” Jordan, 49, said of the Affordable Care Act, which requires most Americans to have insurance or pay a penalty while forcing insurers to cover pre-existing medical conditions.

* * *

In the renewing enemies department:

“Speaker John Boehner didn’t get his way on shutting down health-care reform,” the narrator of the ad featuring a sobbing infant says. “So he shut down the government and hurt the economy.”

The spot produced by the House Majority PAC, a Democratic super-PAC, set to run in Boehner’s Ohio district, is ready for the Sunday game between the Cincinnati Bengals and New England Patriots.

That ought to get the talks going.

* * *

On the first Friday of the partially shuttered federal government, Obama and Vice President Joe Biden went out for a walk at lunchtime.

For lunch.

The two took a short stroll to the popular Taylor Gourmet sandwich shop.

“Part of the reason we’re here is we’re starving and the food is great,” the president said. The other reasons is  “this establishment is offering a 10 percent discount” to furloughed federal workers.

As for the budget standoff:  “We should get this over with as soon as possible.”

Biden bought lunch.

These are not furloughed workers: No break for you. But look who else likes the place:

* * *

Back inside the White House gates, Obama was asked about getting a budget deal:

“Very simple way to do it. Call the vote.”

“When it comes to negotiations, I’ve said I’m happy to have negotiations with Republicans and Speaker Boehner on a whole range of things, but we can’t do it with a gun held to the head of the American people,,” the president said. “So reopen the government, make sure we’re paying our bills — two basic functions the Congress has — and take your cues from folks like this who are more interested in making sure that everybody is being treated fairly.”

“There’s no winning when families don’t have certainty about whether they are getting paid or not,” he said. “I’ve got staff in the White House, there’s staff all across the country in rural areas, working for the Agriculture Department, working for Veterans Affairs, who are on their job despite the fact they are not getting paid or they’ve been sent home want to be on their job. As long as they’re off the job, nobody’s winning. And that’s the point. We should get this over with as soon as possible.”

* * *

House Speaker John Boehner was asked today about reported sniping among leaders in the budget standoff that has partially shuttered the government.

“That is not true,” the Ohio Republican responded at a press event. “I might snipe (to a reporter) once or twice, but I have very good relationships with all my colleagues across the aisle,” he said. “Listen, it’s me…” — all he wants is an agreement.

Following a private meeting among House Republicans this morning, leaders stepped out as they have in recent days to deliver a pointed message — and limit any deep questioning from reporters.

Rep. Kevin McCarthy said it’s great that Obama has canceled his Asian trip this weekend. “Now is the time we get in a room, settle our differences and move this country forward,” the California Republican said at the press event with fellow House leaders.

The way the president proposes resolving this “is to give him everything he wants,” said Rep. Cathy McMorris Rodgers of Washington state, chair of the House Republican Conference. “He says he has bent over backwards to work with us,” she said. “His words may sound good, but action speaks louder than words.”

Boehner maintained that “our goal here wasn’t to shut down the government.” The goal, he said, was to “put fairness” in “Obama-care.” And now that the budget debate behind reopening the government has melded with the debt ceiling increase coming Oct. 17, Boehner said, lawmakers are going to have some expectations of their own.

“I think the American people expect that if we’re going to raise the amount of money we can borrow we ought to do something about our spending,” the speaker said.

Obama, for his part, has insisted that he will not negotiate over his health-care program as part of the shutdown resolution, and he will not negotiate over the debt ceiling. After those duties are met, he has said, he’ll be happy to sit down and talk about other issues.

* * *
Boehner followed up with an e-mail release with his own headline from that appearance:

“I was at the White House the other night, and listened to the president some 20 times explain to me why he wasn’t going to negotiate. Sat there and listened to the Majority Leader in the United States Senate describe to me that he’s not going to talk until we surrender.”

“And then this morning, I get the Wall Street Journal out, and it says ‘well we don’t care how long this lasts because we’re winning.’ This isn’t some damn game!”

* * *

So, sure it was Friday, but the shutdown had reached a mild swearing phase.

First it was Boehner’s “damn game.”

Then came the“ rapid response” e-mail from the  Democratic Congressional Campaign Committee to supporters, uh, looking for money.

“OK, enough of this crap,” the DCCC wrote.

“ This crew of right-wingers in Congress shut down the government because of Obam-acare, plain and simple. Now, they have the nerve to attack innocent bystanders with political stunts. It’s shameless.”

Please send $3 or more, they ask.

* * *
Everyone loves the Capitol Police today.

So much so — the day after forces stopped a woman who rammed barricades at the perimeters of the White House and Capitol yesterday — that legislative leaders have fallen all over themselves commending  their cops.

Yet the guards — their pay frozen like that of other essential government workers near the end of the first week of a partial government shutdown — are becoming something of a pawn for leaders arguing that their party has the formula for reopening the government.

The praise started flowing soon after the shooting stopped outside the Capitol, and it continues today as Democratic and Republican leaders call on each other to get those government paychecks going again.

* * *

Much of the government may be shuttered, but K Street is open for business.

As lobbyist Dennis Potter stood outside a House office building waiting to go through security, he spotted a congressional aide whom he knows. And another. And a third.

Waiting on the two-block-long line to enter the building, as Washington’s partial government shutdown also closed most of the entrances to congressional offices, Potter, a government affairs analyst at K&L Gates LLP, estimated that he talked to about two dozen congressional staff members before going to his scheduled meetings.

“That was one unexpected opportunity to be in touch with those folks,” Potter said.

Even as much of the federal government has shut down, K Street carries on. In fact, with many government functions on hold, lawmakers and those agency officials who remain on the job have more time for meetings.

“There are both issues to talk about and new opportunities to talk about them,” said Bruce Heiman, leader of K&L Gates’ policy and regulatory practice.

Lawmakers are in their offices along with staff, and even in the federal agencies there are employees at work reviewing pending rules and regulations.

“There are lots of meetings and planning sessions and conservations that are still going on,” said Dan Bryant, who runs the policy practice at Covington & Burling LLP. “Advocacy and preparation for advocacy is very much still occurring.”

Dan Renberg, co-leader of the government relations practice group at Arent Fox LLP,  brought an out-of-town client to four meetings during the first day of the government shutdown.

“We had some our most productive meetings of the year,” he said. “Because people had time for slightly more leisurely conversation, the meetings were a little less rushed.”

* * *

With the partial shutdown now inevitably linked to the question of raising the nation’s debt limit by the Treasury Department’s deadline of Oct. 17, Treasury Secretary Jack Lew is making the enormity of defaulting on the nation’s financial obligations known on Capitol Hill.

He will deliver that message in a “full Ginsburg” press of the Sunday morning talk shows.

In the meantime, he is imparting the words of wisdom of his predecessors:

* * *

President Barack Obama this week already had announced that he would cut short his long-planned trip to Southeast Asia this weekend for the Asia-Pacific Economic Cooperation, taking the added stops of Malaysia and the Philippines off his itinerary.

Last night, the White House announced that Obama has scrapped his trip to the APEC summit as well. Secretary of State John Kerry will stand in:

“Due to the government shut-down, President Obama’s travel to Indonesia and Brunei has been cancelled. The president made this decision based on the difficulty in moving forward with foreign travel in the face of a shutdown, and his determination to continue pressing his case that Republicans should immediately allow a vote to reopen the government.”

“The cancellation of this trip is another consequence of the House Republicans forcing a shutdown of the government.   This completely avoidable shutdown is setting back our ability to create jobs through promotion of U.S. exports and advance U.S. leadership and interests in the largest emerging region in the world.  The president looks forward to continuing his work with our allies and partners in the Asia-Pacific and to returning to the region at a later date.”

Obama called President Yudhoyono of Indonesia last night to express his “regret that the ongoing government shutdown in the United States will prevent him from attending the summit,” the White House said. “He reaffirmed the importance of the U.S.-Indonesia partnership, and his personal affection for the people of Indonesia, and said that Secretary Kerry will take his place in Bali.”

APEC is a big deal, the conference of Pacific-rim nations meeting around the perimeter of the ocean in one nation’s host city each year:

* * *

On Capitol Hill, a sense of denial still prevails — a sense of denial among Republicans that the White House is serious about: No concessions on Obama-care, no partial financing of the federal government until a comprehensive continuing resolution for spending is approved.

And so a certain ritual prevails: The House is passing bills the Senate will not accept and the president has threatened to veto.

* * *

House Speaker John Boehner is trying to unite Republicans around a plan to reopen the federal government, raise the debt ceiling and achieve as many of the party’s priorities as they can, Bloomberg’s Roxana Tiron, Michael C. Bender and Heidi Przybyla report. There’s one major problem: the 232 members of his caucus can’t agree on how to do that.

Boehner will be under pressure from multiple factions in his own party when House Republicans meet at 10 a.m. today in Washington, on the fourth day of a partial government shutdown that shows no signs of ending, they report,

“The speaker has been trying to unify us for a long time,” said Rep. Devin Nunes, a California Republican and Boehner ally. “The problem is it’s impossible as long as we have people out telling their constituents that there is a magical way to get 67 senators and 290 House members to override a presidential veto.”

“One group is composed of anti-tax hard-liners who want to use the debt ceiling as leverage to gain concessions from Obama,” our reporters note.

“ Others want to take a more conciliatory stance and are urging Boehner to allow the government to re-open and drop demands related to the Affordable Care Act. It’s not clear what the largest group — 100 or so Republicans not clearly aligned with either side — can support.”

“These disagreements are among the reasons why Republican leaders haven’t released a specific plan. Whatever they do will be designed to merge the disputes over a stopgap spending measure and the U.S. debt ceiling into one fight, hoping to draw Obama into negotiations that the president says won’t happen.”

* * *

Every time the House’s Republicans get into a situation like the one they’re in now, where it might take some Democrats to pass something that the Democratic-controlled Senate and White House will accept as a way out of the partial government shutdown, someone invokes “The Hastert Rule.”

Bloomberg’s Laura Litvan reports here in Political Capital that Republican Dennis Hastert, the former House speaker from Illinois, says there is no such thing — or, the way he tells the story, it’s more of a practice than a rule. `

`There was no Hastert rule,” Hastert said, as he stopped off for coffee in the kitchen of Bloomberg’s Washington bureau. He reiterated this a number of times, to be sure.

The history of it is this, he explained: He he was asked at a press conference in 2005 or 2006 about when he might move an immigration bill, and he told a reporter he didn’t have the votes. The reporter asked why he couldn’t seek some Democratic votes, pointing out that he could muster enough support if he did that.

“I said, `I’m not going to move anything that I don’t have the majority of my own party on board,”’ Hastert said. “That’s common sense.’ ‘ “They dubbed that `the Hastert rule’ and beat me up about it.” Asked about House Speaker John Boehner’s application of this concept today, Hastert defended the hard political line.

“If you’re going to the other side and getting most of their votes, they’re going to be determining what the policy is,” he said. “So if you want to be the leader and determine what the policy is, you better have the majority of your conference behind you.”

The man who once ran the House has his own office in Illinois now, and 28 followers on Twitter:

@SpeakerHastert

Back in the day, I ran this joint. Now I’m just spending my days reading Internet sites and hoping people don’t forget about me. Sigh. I used to be powerful.

Asked how he thinks the current fight over a stopgap spending plan that has brought most government services to halt will end, Hastert predicted that it will go all the way into the debt-ceiling debate — operative deadline for now, Oct. 17 — and won’t be resolved until then. He allowed that he doesn’t know the Republican strategy — perhaps his party will get some small concession, he said, but it is unlikely to unravel President Barack Obama’s health-care program, and that’s pretty clear.

“It’s awful hard to undo a law, especially when you don’t have a majority in the Senate or the presidency,” Hastert said. Yet he insisted that Boehner has no choice but to hold the line and impose the old rule. (Or concept, notion, whatever.)

“Boehner has to do what he has to do,” Hastert said. “But my view is that he’s in jeopardy if he does this. There are enough people to the right that if he pushes this thing through with a majority of Democratic votes, there will be a lot of Republicans who feel disenfranchised. If you lose that trust, you can’t lead.”

 

* * *

The House’s Republicans are approving all sorts of budget measures that, on the face of them, are incontrovertible. Yet the White House, maintaining this is no way to finance the government, promises to veto anything short of a full spending plan.

* * *
Everyone wants everything. That appears to be the common complaint of both sides in the shutdown debate.

* * *

It seems for U.S. businesses, the only thing worse than too much government is no government at all.

The U.S. Chamber of Commerce, which spent $35.7 million during the 2012 campaign, primarily in support of Republicans, deployed its army of lobbyists to encourage an end to the first partial government shutdown in 17 years, Bloomberg’s Jim Snyder, Brian Wingfield and Jonathan Salant report. Across town, top Wall Street executives gathered at the White House and warned of the consequences if no resolution was found to the next crisis, a potential default on federal debt.

“Our top lobbyists have been on the Hill and making calls,” said Blair Latoff Holmes, a spokeswoman for the Washington-based Chamber of Commerce, which represents companies including Exxon Mobil Corp. (XOM) and Ford Motor Co. (F), said in an e-mail. “We’re continuing to talk to scores of members of Congress and their staff.”

Pressure from the business community has worked in the past to forge compromise. In 2012, the Chamber of Commerce fought to secure the reauthorization of the U.S. Export-Import Bank, which helps foreign buyers purchase American exports, after Tea Party Republicans favoring limited government threatened to block an extension of the bank’s charter.

The Chamber also lobbied to end the 1996 government shutdown, which lasted a total of 21 days.

Some lobbyists said business’s ability to exert influence this time is limited because the dispute is driven by a deep ideological divide over the value of President Barack Obama’s signature health-care overhaul, which the House is seeking to delay in exchange for continued funding of the government, our reports note

“Obamacare is a theological issue for Tea Party Republicans,” said Michael Hacker, a former House Democratic aide who now works at a lobbying and public relations company HDMK. “No amount of pressure from the business community is going to change their convictions.”

That isn’t keeping businesses — from banks to travel companies to defense contractors — from trying.

“There’s a consensus that we shouldn’t do anything that hurts this recovery,” Goldman Sachs Group Inc.  Chief Executive Officer Lloyd Blankfein said after meeting with Obama at the White House. “They shouldn’t use the threat of causing the U.S. to fail on its obligations to repay its debt as a cudgel.”

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