Shutdown Journal: Day 16

Updated at 9:55 am through 11 pm EDT

Come on back to work, the White House says.

Sylvia Mathews Burwell, director of the Office of Management and Budget, said after congressional approval of a fiscal deal ending the 16-day partial government shutdown tonight that Washington and offices around the country will be open for business:

“Now that the bill has passed the United States Senate and the House of Representatives, the President plans to sign it tonight and employees should expect to return to work in the morning. Employees should be checking the news and OPM’s website for further updates.”

 * * *

The Senate voted 81-18 tonight to halt the 16-day government shutdown and raise the U.S. debt limit, ending the nation’s fiscal impasse.

The House voted 285-144 tonight. More than 70 Republicans joined  the Democrats approving it — proving a point that the minority party had made for some time, that a “clean vote” on a budget with Obamacare limits could pass the House.

President Barack Obama supports the agreement, as Bloomberg’s Richard Rubin, Kathleen Hunter and Roxana Tiron report, and stood ready to sign it.

Congress acted the day before U.S. borrowing authority was scheduled to lapse as Congress engaged in its fourth round of fiscal brinkmanship in less than three years.

“There are only so many times we can do this without the wolf really being at the door,” Sen. Mark Warner, a Virginia Democrat, said on Bloomberg Television before the vote.

The agreement puts federal workers back on the job, prevents a potential default on U.S. debt and makes no major policy changes sought by Republicans. Lawmakers didn’t resolve any of their long-term divides on fiscal policy and will have to return to the same issues over the next four months.

The deal concludes a four-week fiscal standoff that began with Republicans demanding defunding of Obama’s 2010 health-care law and objecting to raising the debt limit and financing the government without attaching policy conditions. They achieved almost none of those goals in the agreement.

* * *

“We just didn’t win,” House Speaker John Boehner told a radio station in Cincinnati today.

“We fought the good fight,” the Ohio Republican said.

* * *

“The House has fought with everything it has to convince the president of the United States to engage in bipartisan negotiations aimed at addressing our country’s debt and providing fairness for the American people under ObamaCare,” Boehner said in a statement released by the speaker’s office.  “ That fight will continue. ”

“But blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us,” he said. “In addition to the risk of default, doing so would open the door for the Democratic majority in Washington to raise taxes again on the American people and undo the spending caps in the 2011 Budget Control Act without replacing them with better spending cuts.  With our nation’s economy still struggling under years of the president’s policies, raising taxes is not a viable option. Our drive to stop the train wreck that is the president’s health care law will continue.  We will rely on aggressive oversight that highlights the law’s massive flaws and smart, targeted strikes that split the legislative coalition the president has relied upon to force his health care law on the American people.”

* * *

The Senate’s leaders produced the agreement that will end the partial government shutdown and extend the nation’s debt limit .

“The compromise we reached will provide our economy with the stability it desperately needs… Our country came to the brink of disaster,” Senate Majority Leader Harry Reid said on the Senate floor this morning.

The agreement requires that leaders appoint a budget conference committee to put the government on a path to “long-term stability.” The budget chairmen, Sen. Patty Murray of Washington and Rep. Paul Ryan of Wisconsin, will lead it.

The proposed agreement opens the government through Jan. 15, lifts the $16.7-trillion debt ceiling through Feb. 7 and requires a bicameral budget conference committee by Dec. 13.

* * *

“The president believes that the bipartisan agreement… will reopen the government” and remove the threat to the economy that “brinkmanship” on Capitol Hill posed, White House press secretary Jay Carney said today.

“He looks forward to Congress acting,” Carney said, so he can sign it. While refusing to place any odds on the House’s passage of the plan, he said the president “hopes” both sides will act quickly.

“There are no winners here,” Carney added. “The American people have paid a price.”

* * *

“The deal that has been cut provides no relief to the millions of Americans who are being hurt by Obama-care,” complained Sen. Ted Cruz of Texas, a Republican who led a failing fight to restrict the president’s health-care program as part of a budget deal.  Yet Cruz signaled that he will no longer resist the agreement — on the eve of the expiration of the nation’s borrowing authority.

“The timing of this vote… is likely to occur today,” he said. “There is nothing to be gained by delaying this vote.”

* * *

Tea Party groups aren’t willing to concede that the war is over.

Jenny Beth Martin, national coordinator for Tea Party Patriots, insisted that House Republicans not approve the Senate legislation. Her complaints vividly illustrate how Boehner wound up with his no-win scenario, Bloomberg’s Jonathan Salant reports.

“The Senate deal is a complete sellout,” Martin said in a statement. “The House `leadership’ must stop playing `flinch’ with themselves and instead play hardball with the White House, the Senate and the House.”

As for a Republican provision requiring stronger verification of eligibility for health-insurance subsidies, which made it into the final agreement, Martin dismissed it as “a hollow plan.”

* * *

Salant also reports that The Club for Growth, which has funded primary challenges to Republicans it deems not conservative enough, urged lawmakers to vote against the budget deal — and warned that the vote would be included in its congressional scorecard.

“This announced plan, the details of which aren’t completely known, appears to have little to no reforms in it,” said Andy Roth, vice president of government affairs, in a letter to lawmakers just released. “There are no significant changes to Obamacare, nothing on the other major entitlements that are racked with trillions in unfunded liabilities, and no meaningful spending cuts either.”

“If this bill passes,” he wrote, “Congress will kick the can down the road, yet again.”

* * *

And another Tea Party-aligned group, FreedomWorks, also condemned the deal.

Like Club for Growth, Salant reports, FreedomWorks has not hesitated to support challenges to Republicans it deems not conservative enough, including Mike Lee, now a senator, over two-term incumbent Bob Bennett in Utah.

“Republican leadership has completely lost its way,” President Matt Kibbe said in a statement. “Not only is this proposal a full surrender- it’s a complete surrender with presents for the Democrats. Apparently Mitch McConnell’s idea of a ‘compromise’ is to increase the debt limit, fully fund a broken health care law, and promise talks of increasing spending down the road.”

* * *

Approaching the eve of an ominous deadline, the makings of a Senate-negotiated end to the partial government shutdown arrived this morning. The Republican-run House also appeared ready to cast a vote on a “clean” bill free of restrictions on the president’s signature health-care law, the conflict that started the partial government shutdown on Oct. 1.

Boehner would allow a vote on the emerging Senate proposal, Rep. Kevin Brady of Texas, a senior House Republican said on Bloomberg Television.  He said he thinks the House Republicans’ inability to come up with a plan to raise the debt limit before U.S. borrowing authority lapses tomorrow meant that the House would have to accept whatever Senate leaders come up with.

“This party is not uniting behind our core issues,” Brady said. “As a result, I think we are all frustrated with our ability to impact this overall agreement.”

Some of the House’s Republicans, who have fought an agreement since Oct. 1 if it included no brake on the president’s health-care law and then having failed at their own alternatives, would be asked to fall in line before the U.S. exceeds its borrowing authority tomorrow. The House’s Democrats would have to carry the bill across the line.

Yet, procedurally, that deadline could pass before Congress actually ratified any agreement — unless both Senate and House were able to rally in a fashion that has eluded them for 16 days. It could be days, still, before the government might default on any debt payments or other bills.

Still, playing it this close to the line was inviting unknown risks — as seen in a negative watch placed on the U.S. government’s AAA credit rating by another agency.

* * *

Boehner planned to allow a House vote on a “clean” bill today — one free of restrictions on “Obama-care” — according to  Rep. Charlie Dent, a Pennsylvania Republican.

National Review Online first said its Senate sources reported that Boehner was prepared to take up a Senate-negotiated plan and pass it with the backing of the House’s Democrats.

* * *

As a measure of how emboldened the president has been by the fight with the House’s Republicans, he was presaging the next challenge ahead:

“Once that’s done, you know, the day after — I’m going to be pushing to say, call a vote on immigration reform,” President Barack Obama told Univision’s Los Angeles affiliate in one of three interviews he gave to local television stations yesterday. “And if I have to join with other advocates and continue to speak out on that, and keep pushing, I’m going to do so because I think it’s really important for the country. And now is the time to do it.”

* * *

Senate leaders were rushing to lock down an agreement to end the fiscal impasse, stepping in after House Republicans’ last-minute plan to avert a U.S. government default collapsed, as Bloomberg’s Richard Rubin, Katlheen Hunter and Roxana Tiron report.

The emerging Senate accord could be announced as early as this morning, though passage in the Republican-led House was far from assured — as Fitch Ratings yesterday placed the U.S.’s AAA credit rating on a negative watch. Standard & Poor’s downgraded U.S. credit during the last fiscal standoff in 2011.

The framework being negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell presented the clearest path to ending the 16-day-old partial government shutdown and extending U.S. borrowing authority, which lapses tomorrow. It would fund the government through Jan. 15, 2014, and suspend the debt limit until Feb. 7.

Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach,” Adam Jentleson, Reid’s spokesman, said in a statement last night.

Whether the U.S. misses promised payments, including benefits, salaries or interest, may depend on two Republican lawmakers. In the Senate, Texas Republican Ted Cruz, who has led a campaign against Obama’s signature health-care law, the Affordable Care Act offering insurance to millions lacking it, has left open the possibility of delaying the debt-ceiling measure. If any of the 100 senators chose to delay it, a vote could be pushed to as late as next week.

In the House, Speaker John Boehner of Ohio would face one of the most important decisions of his tenure as speaker: whether to allow a Senate agreement to come to the House floor unimpeded, or try to amend it. Democrats say they could pass a Senate deal in the House, with a handful of Republicans, if Boehner would allow a vote.

* * *

“We’ve lost the fight,” Arizona Sen. John McCain, said in an interview yesterday. “We’ve got to come to an agreement as soon as possible.”

* * *

After more than two weeks, a standoff started by Cruz in a bid to block the president’s signature health-care program could be ending with the Affordable Care Act intact — which is more than could be said for the public’s respect for Congress.

“I’ve said all along this is madness. It was madness to follow Ted Cruz” — Rep. Peter King, a New York Republican, interviewed by CNN’s Anderson Cooper last night.

He was asked if a bill coming out of the Senate with a “clean” reopening of the government and extension of the debt limit could pass the Republican-run House. “If it comes to a vote on the House floor, you’ll get all of the Democrats and certainly enough of the Republicans to pass it through,” King said. “It’s getting too close to the wire.”

Republican strategist Alex Castellanos:

“Math is math,” Castellanos said of the inevitable vote.

Rep. Xavier Becerra, a California Democrat, suggested that if “the adults” in the Senate send the House a bill and no one gets in the way of it, the votes are there for quick passage.

* * *

The political fallout from this standoff remains to be calculated.

When the Republicans have an undertaker — Rep. Steve Southerland of Florida — leading them in verses of “Amazing Grace,” as the House caucus did yesterday, the party knows it has a problem.

That’s Republican consultant Mike Murphy’s take, voiced on MSNBC’s “Morning Joe” today.

* * *

Obama was choosing his words carefully, when he says anything at all, while Democrat and Republican lawmakers hashed out how to end the government shutdown and stave off a U.S. default, Bloomberg’s Mike Dorning and Lisa Lerer report.

“The president’s only public event so far this week was mingling with furloughed federal workers who volunteer at a local Washington charity rather than huddling with lawmakers.” they note. “Yesterday, amid a rush of Capitol Hill negotiations in the House and Senate, media access to a White House session between Obama and House Democratic leaders was limited to a few moments for photographs and video — no statements.”

Obama’s decision to mostly remove himself from the public side of the deal-making in Congress marks a shift in how he’s treating Republicans trying to thwart his agenda.

“He’s taking a different tack,” said James Thurber, a political science professor at American University in Washington who studies relations between the president and Congress. “His negotiating style this time is to stand back from the fray and have surrogates do it.”

One sign that the administration is intent on keeping Congress as the focus was a meeting that didn’t happen: a scheduled session with the four top congressional leaders that was postponed Oct. 14 after talks between  Reid and McConnell on a deal showed promise.

Vice President Joe Biden, who negotiated with McConnell late last year to avert spending cuts and tax increases known as the fiscal cliff, also has stayed on the sidelines.

“Obama’s avoidance of public talks with Congress reinforces an administration goal of seeking to break the precedent he set in the 2011 debt-limit talks and show he won’t give concessions under the threat of default,” Dorning and Lerer report. `’Former top administration officials and Obama advisers have said the president and his aides concluded his high-profile negotiations wit Boehner two years ago, which were followed by the first downgrade of U.S. government debt, was a mistake that damaged the president’s ability to advance his agenda.

Obama’s aides question whether Boehner, an Ohio Republican, can deliver on any deal struck with the White House this time because of dissent within his party, according to administration officials who asked for anonymity to discuss strategy. Boehner was dealt a blow last night when he had to scrap a vote on his latest proposal for lack of Republican support.

* * *

China, the U.S.’s largest creditor abroad, has urged American lawmakers opposed to raising the debt limit by today to get out of the way, Bloomberg’s Ian Katz and Michael C. Bender report. Tea Party Republicans’ response: mind your own business.

The U.S. must “shoulder its responsibility” as the world’s biggest economy and holder of the main reserve currency and “take concrete measures before Oct. 17 to avoid a default,” Deputy Finance Minister Zhu Guangyao said at a briefing with reporters in Beijing in which he referred to “the attitude of the Tea Party.”

Lawmakers tied to the Tea Party didn’t appreciate the advice, even from a nation that holds almost a quarter of foreign-owned Treasuries — $1.28 trillion as of July.

“They need to stay out of our politics,” Rep. Blake Farenthold, a Tea Party-backed Texas Republican, said in an interview. China’s criticism “almost sounds like a threat,” said Rep. Ted Yoho, a Florida Republican. “For them to say something derogatory about the Tea Party, I take offense to that.”

The appeal from China, the world’s second-largest economy, underscores the importance of U.S. Treasuries to global financial markets. Treasuries are viewed as a safe haven for countries trying to reduce risk, and any doubt about U.S. ability to pay its debt could rattle investors.

The yield on the benchmark 10-year Treasury note rose to a three-week high of 2.73 percent yesterday and the Standard & Poor’s 500 Index fell 0.7 percent as efforts to reach a compromise on the debt limit faltered. After markets closed in the U.S., the U.S.’s AAA credit grade was placed on the ratings watch negative by Fitch Ratings.


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