Debt Crisis Averted: Gov’t Opening

Photographer: Pete Marovich/Bloomberg

Members of the House of Representatives leave the U.S. Capitol in Washington, D.C., on Oct. 16, 2013.

Updated at 11:05 am through 2:24 pm EDT

First the White House during the shutdown and then the president today asserted that there are no winners in the debacle that held the government in limbo for 16 days and almost threatened U.S. borrowing authority.

Isn’t the president the winner, really?

“If that’s winning, it’s not worth winning,” White House press secretary Jay Carney said today.

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It’s official, crisis over: Ohio clock ticking:

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President Barack Obama, glad that “the cloud of crisis” has passed, delivered something of a lecture from the White House this morning, on the first day of a reopened federal government and the averting of a debt crisis. Obama called for political harmony, and set an agenda for action.

House Speaker John Boehner?

He was leaving town:

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“There has been a lot of discussion lately about the politics of this shutdown, but let’s be clear, there are no winners here,” Obama said today at the White House, delivering a speech and taking no questions.

The economy has suffered, home-buyers have been affected, consumers have cut back on spending and employers have refrained from hiring, he said.

It”s “no surprise,” the president said, “that the American people are completely fed up with Washington.” At a time when the economy needs a push, he said, another “self-inflicted crisis” has “set us back.”

The “spectacle” of the 16-day partial shutdown of the government that ended late last night has emboldened the nation’s enemies and discouraged its allies, he said.

The good news, he said: “The full faith and credit of the United States remains un-threatened.”

Now, he said, it’s time for political damage control. “All of us need to stop focusing on the lobbyists, the bloggers, the talk radio,” he said, “and get our fiscal house in order for the long haul. “That’s why we’re here. That should be our focus,” Obama said. “We all know we have divided government– there’s a lot of noise out there.”

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There are three places where progress can be made, the president said:

— A balanced approach to a responsible budget. “Remember,” he said, “the deficit is getting smaller, not bigger. The challenge we have right now are not short-term deficits. It’s the long-term obligations we have around things like Medicare and Social Security… The key now is a budget that cuts out the things we don’t need,” cuts out corporate tax breaks and devotes money to what’s important.

— “We should finish the job of fixing our broken immigration system… This can and should get done by the end of this year.”

— “We should pass a farm bill.”

“I understand that we will not agree on everything now that the cloud of crisis has passed,” Obama said. It’s “OK,” he said, that people dispute his agenda. “We can debate… in good faith, through the democratic process.”

There’s no reason, he said, why progress can’t be made “without lurching from one manufactured crisis to another manufactured crisis.”

He was not without some sharp words for his opponents in the debt debate, however — crediting Democrats and “responsible Republicans” for resolving the standoff. Government actually has a purpose, he said to those who see government as the enemy. And he thanked the federal workers who worked without pay or who were furloughed.

“Thank you,” Obama said to the federal workforce. “Welcome back.”

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And here’s some welcome post-shutdown news:

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The damage to the American economy is said to total $24 billion.

Yet somebody sees some opportunities here:

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Breathe deep, for now.

The U.S. government’s borrowing authority was set to expire today — until Congress enacted an 11th-hour extension and plan to reopen a partially shuttered government on the brink of what promised to be an economic catastrophe if un-addressed.

In the end of a 16-day shutdown, the Senate and House last night approved a solution negotiated by the Senate’s Democratic and Republican leaders and relnctantly accepted by the Republican-run House. President Barack Obama, who had insisted on a debt extension and budget resolution without any strings impinging his signature health-care program attached, signed it just after midnight.

While they have averted the immediate crisis, they also have punted decisions about the budget and debt into January and February — and they are ordering a conference committee from both chambers to start confronting the budgetary questions in mid-December.

“We now have an opportunity to focus on a sensible budget,” Obama said last night after the Senate overwhelmingly approved the deal and the House prepared to vote. “Hopefully next time it won’t be at the 11th hour.”

“There’s a lot of work ahead of us, including our need to earn back the trust of the American people that’s been lost over the last few weeks,” the president said. “We’ve got to get out of the habit of governing by crisis.”

Is this going to happen all over again in a few months, the president was asked on his way out of the press briefing room of the White House last night.

Over his shoulder, the departing and triumphant president replied:


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Come 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 last night that Washington and offices around the country will be open for business today:

“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.”

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House Speaker John Boehner, who lost his fight with Obama and Senate Democrats, attempted a quick pivot last night after the House voted, immediately announcing his appointments to the conference committee that will start negotiating a bigger budget deal in December.

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And everyone breathed a collective sigh of relief.

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After the partisan passions and heated rhetoric, the disruptions of a government shutdown and displays of dysfunction, Congress did what it could have done weeks ago: voted to fund the government and lift the debt limit, Bloomberg’s Terry Atlas, Roxana Tiron and Kathleen Hunter report.

The passage last night by wide margins — an 81-18 vote in the Democratic-led Senate, followed by a 285-144 vote in the Republican-controlled House — allows the U.S. to avoid default and ends the shutdown that began Oct. 1 and has taken $24 billion out of the economy.

Obama signed the bill just after midnight, according to a White House statement. The measure puts government workers back on the job as soon as today and permits the U.S. to continue paying its debts, benefits and salaries.

“We’ll begin reopening our government immediately and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people,” Obama said last night at the White House after the Senate voted.

Lawmakers didn’t show they’re any closer to resolving the underlying issues of spending priorities and deficit-reduction measures, particularly in the House where a shrinking political middle makes compromise elusive as the latest events show.

The focus now shifts to a new series of deadlines — the first for budget negotiations with a Dec. 13 target — that set up more rounds of political combat over taxes and spending on programs including Social Security and Medicare. The deal funds the government at Republican-backed spending levels through Jan. 15, 2014, and suspends the debt limit through Feb. 7.

Tea Party-allied Republicans, such as Texas Sen. Ted Cruz, said they would find ways to keep up the fight against Obama’s health-care law.

The votes conclude a four-week fiscal standoff that began with Republicans demanding defunding the Patient Protection and Affordable Care Act, and objecting to raising the debt limit and funding the government without policy conditions.

They achieved almost none of those goals. Obama and the uncharacteristically unified congressional Democrats stared down Republicans, particularly those allied with the Tea Party movement, who had sought to use the shutdown and debt ceiling as leverage even as more experienced lawmakers realized they didn’t have the votes.

Judd Gregg, a former New Hampshire Republican senator and veteran of Obama’s first-term fiscal commission, said members of his party took on the wrong fight when they made it about Obama’s health-care law. Gregg is now chief executive officer of the Securities Industry and Financial Markets Association.

“It was an exercise in dysfunctional government,” Gregg said in an interview. “It was a loser position from the beginning because there was no way in divided government you’re ever going to repeal Obamacare. We should have been debating as Republicans how we fix our fiscal house.”

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The White House insisted there were no winners in this dispute — yet the future holds questions about that.

Boehner, acceding to the demands of the White House and Democratic-led Senate in an agreement to end a partial government shutdown and avert a potential debt crisis, has tougher fights coming in the fiscal debates pushed into January and February by the accord. His ability to legislate will be tested in the year ahead.

From the start of the standoff with Obama — with a faction of the House’s Tea Party-backed Republicans seeking to defund, delay or declaw the president’s signature health-care law — Boehner faced a dilemma that could undermine his grip on leadership, this Bloomberg reporter reports today.

Ultimately, the resolution of the 16-day shutdown and an imminent threat to U.S. borrowing authority say more about Boehner’s capacity to run the House for the rest of this session of Congress, through 2014, than about his ability to hold the reins of a chamber that’s expected to remain in Republican hands past next year’s elections.

The speaker will have to reunite Republicans divided in a fight over Obamacare and stake out winning strategies instead. That means his success depends on the party agreeing on some lessons learned in this struggle and on his ability to lead more and listen less to fractious forces within his own party.

“He may have gained some points with the Tea Party caucus, but he did so at the cost of poor relations with everyone else,” said Darrell West, vice president of governance studies at the non-partisan Brookings Institution in Washington. “It will be hard for him to cut deals because no one believes he can deliver votes any more.”

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With each pull of a lever of power, Republicans sapped their own strength, Bloomberg’s Michael Tackett reports.

Boehner may have had little choice in the fight over Obamacare other than showing his unyielding faction of Tea Party members what their strategy would bring, right up to the point of a potential economic calamity, said Mike Murphy, a Republican consultant who has advised several presidential campaigns.

“Republicans in the House, with a little help from Ted Cruz, got all excited with this stupid wing strategy that has now done a lot of damage to our brand,” said Murphy, in a reference to the Texas Republican senator who spurred the confrontation with the White House. “We’ve taken a big blow.”

Republicans used procedural rules to include measures to thwart Obamacare in legislation designed for appropriating funds to pay for government operations. They then used tactics to delay votes to the point that a breach of the $16.7 trillion debt ceiling came into play.

With each move, polls showed, they lost more public support and strengthened Obama’s resolve. The lessons Republicans draw from their defeat, starting with how they approach budget talks set to produce an accord by Dec. 13, will set the direction for the party.

Cruz and his supporters criticized the agreement reached to fund the government and raise the borrowing authority as a win for “the Washington establishment.” He described the House Republicans’ defiant stance as “a profile in courage.”

Heritage Action for America, the advocacy arm of the Washington-based Heritage Foundation headed by former Republican Senator Jim DeMint of South Carolina, is saying that the party needs to add to its Tea Party-aligned faction in 2014 as a prelude to the 2016 presidential campaign in order to achieve the goal of repealing Obamacare.

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Days before the U.S. risked a debt default, Bloomberg’s Julie Hirschfeld Davis and Michael C. Bender report, Senate Majority Leader Harry Reid had the chance to pocket a deal. Instead, he went for the kill.

Reid, a Nevada Democrat and a former competitive boxer, called Sen. Joe Manchin on Oct. 13 and insisted the West Virginia Democrat deny reports of an agreement among a bipartisan group of senators to re-open the government and raise the debt ceiling.

Reid was in one-on-one talks with Senate Minority Leader Mitch McConnell that he wanted to end in a better deal from Republicans, who were in retreat as they took greater blame for the impasse in public polls. The White House, for its part, was warning Democratic leaders off of what it viewed as an unfavorable compromise emerging from the bipartisan group.

In response, Manchin and other Democrats issued a statement announcing there was no agreement to end the standoff, which became the final in a series of instances in which Reid, 73, maneuvered to ensure that Democrats blunted Republican demands in the fiscal fight that shut the government down for 16 days and risked a U.S. default on its debts.

Reid’s hardline stance yielded results last night when Congress passed legislation that omitted every Republican goal.

“This is far less than many of us had hoped for,” McConnell, a Kentucky Republican, said in the hours before the measure passed the Senate by a bipartisan 81-18 vote. It later passed the Republican-controlled House in another bipartisan vote, 285-114.

As Reid’s firm hand helped keep Senate Democrats united, his Republican counterpart across the Capitol was left to pick up the pieces from a debate his rank-and-file pushed for that ultimately left them splintered and with little other accomplishments than declining poll numbers.

House Speaker John Boehner of Ohio warned his fellow Republicans in an Oct. 14 meeting that Reid was launching a “hand grenade” at them. Yet with Tea Party-backed Republicans refusing to yield in the fight to dismantle the three-year-old Affordable Care Act, Boehner, 63, had no choice but to catch it.

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Texas Sen. Ted Cruz stayed true to his campaign mantra “stand and fight” as he stood amid a crowd of reporters and vowed to keep pressing to dismantle Obama’s health-care law, Bloomberg’s Julie Bykowicz and Heidi Przybyla report .

“This fight, this debate will continue until collectively the American people can make D.C. listen,” said Cruz, as other Republican senators streamed out of a meeting lamenting the political damage wrought by an unwinnable showdown with the White House championed by one of their newest members.

Cruz, 42, is emerging from what Arizona Republican Senator John McCain called a “shameful chapter” in the Senate’s history largely unscathed in the eyes of his donors and Republican activists.

“To the conservative movement in America, he is what courage looks like,” said Matt Hoskins, executive director of the Senate Conservatives Fund, a group that promotes Tea Party-backed candidates who favor smaller government.

Cruz, a lawyer who argued cases before the U.S. Supreme Court prior to his 2012 election, is counted among prospective Republican Party presidential contenders in 2016. His take-no-prisoners approach could play well in Iowa, where caucuses typically start the nomination process, said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University Carbondale and a former political reporter in Iowa for 30 years.

“He scored a lot of points with the party’s most conservative elements, and those are people who dominate the caucuses,” said Yepsen, cautioning that Cruz will need to guard against the dangers that come with a high profile. “A meteoric rise like this can be accompanied by a meteoric fall.”

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Shutdown Journal, signing out:

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