December 12, 2013
Thursday deadline to avoid defaultSunday, October 13, 2013
US shutdown negotiations shift to the Senate
WASHINGTON — The focus of efforts to end the government shutdown and prevent a US default shifted to the Senate yesterday, where leaders were in talks aimed at resolving the twin stalemates.Word of the negotiations between Senate Majority Leader Harry Reid and the top Republican, Senator Mitch McConnell, emerged as the Senate rejected a Democratic effort to raise the government’s borrowing limit through next year.
“This bill would have taken the threat of default off the table and given our nation’s businesses and the economy the certainty we need,” the White House said in a statement.
Republicans objected because they want the extension to be accompanied by spending cuts.
The spotlight turned to the Senate as the partial shutdown reached its 12th day. It also came with the calendar edging closer to October 17, when administration officials have said the government will deplete its ability to borrow money, risking a first-time federal default that could jolt the world economy.
There are two issues at play: the US government has been partially shut since October 1, idling about 350,000 federal workers, because of Congress’ failure to pass a normally routine temporary spending bill. Separately, Obama wants Congress to extend the government’s borrowing authority, another matter that usually had been routine..
House Speaker John Boehner told fellow Republicans earlier yesterday that his talks with President Barack Obama had stalled.
“The Senate needs to hold tough,” Republican Representative Greg Walden said Boehner told his party’s House lawmakers. “The president now isn’t negotiating with us.”
Republican senators said the talks between Reid and McConnell had started Friday. That was confirmed by Senate Democratic aides.
Yesterday’s Senate vote derailing the Democrats’ debt-limit measure was a near party-line 53-45 in favour of the bill. That fell seven short of the 60 votes required to overcome Republican objections to considering the measure under Senate procedural rules.
“The only thing that’s happening right now is Senator Reid and Senator McConnell are talking. And I view that as progress,” said the second-ranking Republican senator, John Cornyn of Texas.
House conservatives said Obama was to blame for the talks with their chamber running aground.
“Perhaps he sees this as the best opportunity for him to win the House in 2014,” said Republican Rep. John Fleming. “It’s very clear to us he does not now, and never had, any intentions of negotiating.”
Obama has said repeatedly in recent weeks that he is willing to negotiate with Republicans on budget, health care or other issues, but only after the government is reopened and, separately, the US$16.7 trillion debt limit is raised.
He has insisted that he will not make concessions to Republicans who are trying to use the government shutdown and debt ceiling as leverage, saying that would only encourage the opposition party to use the same tactics in the future.
“It doesn’t have to be this way. It’s not supposed to be this way,” Obama said in his weekly radio and Internet address yesterday. “Manufacturing crises to extract massive concessions isn’t how our democracy works, and we have to stop it. Politics is a battle of ideas, but you advance those ideas through elections and legislation, not extortion.”
A bipartisan group of senators, closely watched by Senate leaders, is polishing a plan aimed at reaching a compromise with Obama.
An emerging proposal by moderate Republican Senator Susan Collins and others would pair a six-month plan to keep the government open with an increase in the government’s borrowing limit through January.
Obama has turned away a House plan to link the re-opening of the government, and a companion measure to temporarily increase the government’s borrowing cap, to concessions on the budget.
In the face of disastrous opinion polls, Republican leaders have signaled they will make sure the debt limit is increased with minimal damage to the financial markets.
But they’re still seeking concessions as a condition for reopening the government.
Obama met Senate Republicans on Friday and heard a pitch from Collins on raising the debt limit until the end of January, reopening the government and cutting the health care law at its periphery.
The Collins proposal would delay for two years a medical-device tax that helps finance the health care law, and it would subject millions of individuals eligible for subsidies to purchase health insurance under the program to stronger income verification.
Collins said Obama said the proposal “was constructive, but I don’t want to give the impression that he endorsed it.”
The White House and Republicans have negotiated almost $4 trillion in deficit savings in the past three years. But little of that has come out of benefit programs such as government insurance for the poor and the elderly. The current Republican proposals seemed an attempt to open up that part of the budget to scrutiny.
After four years of trillion-dollar deficits, the 2013 federal budget shortfall is expected to register below $700 billion, but Republicans say more cuts are essential. At the same time, the nation’s debt is rising inexorably _ the reason for the effort to raise borrowing limit to cover it. The debt was $10.6 trillion when Obama took office during the worst recession in decades, and has grown by $6.1 trillion in the years since.
The shutdown, meanwhile, has sent ripples nationwide.
The aerospace industry reported that furloughs at the Federal Aviation Administration have resulted in a virtual stop to certification of new aircraft, equipment and training simulators. State governments have also started laying off employees whose programs depend on federal funding and warning of thousands of additional furloughs if the budget stalemate is not resolved soon,
At the same time, some states have begun putting up their own funds to temporarily reopen national parks after the Obama administration approved reopening tourist areas across the U.S. However, the states were told they would not be reimbursed for such payments.
So far, Utah, Colorado, South Dakota, Arizona and New York have agreed to open parks that had been closed since the beginning of the month. Meanwhile, governors in other states were trying to gauge what would be the bigger economic hit _ paying to keep the areas operating or losing the tourist money that flows when the scenic attractions are open.
Tourists returned to the Grand Canyon on Saturday, and the Statue of Liberty in New York harbor will reopen to the public on Sunday. Mount Rushmore in South Dakota and Zion National Park in Utah were among the other landmarks scheduled to open by Monday.