Senate leaders pick up the pieces after House plan goes bust

BY Terence Burlij  October 16, 2013 at 9:10 AM EST


Photo by JIM WATSON/AFP/Getty Images

Sometimes you seize the day, and sometimes the day seizes you.

With the country on the brink of default, House Speaker John Boehner’s quixotic campaign to rally his fractious conference behind a last-ditch proposal to reopen the government and raise the debt ceiling combusted in spectacular fashion on Tuesday.
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The collapse left Senate leaders with little time to resurrect a bipartisan agreement that had been in the works, but put on hold to let the process in the House play out. Despite the hours lost, both Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell sounded similar notes of confidence that a deal could be finalized in short order.

“Senator Reid and Senator McConnell have re-engaged in negotiations and are optimistic that an agreement is within reach,” said Reid spokesman Adam Jentleson.

“Given tonight’s events, the Leaders have decided to work toward a solution that would reopen the government and prevent default. They are optimistic an agreement can be reached,” added McConnell spokesman Don Stewart.

When the day began Tuesday, Reid and McConnell had been discussing an agreement to fund the government for three months and raise the debt limit through Feb. 7, with a minor change to the health care law that would require income verification for people receiving government subsidies to purchase insurance.

The proposal floated by House GOP leaders would have only funded the government through mid-December, eliminated health care subsidies for members of Congress and top administration officials, and prohibited the Treasury Department from using “extraordinary measures” to stretch its borrowing authority.

Not long after Boehner presented that new plan to his members came the backlash from Democrats. Reid took to the Senate floor, calling the GOP approach a “blatant attack on bipartisanship” that would “torpedo the Senate’s bipartisan progress.” House Minority Leader Nancy Pelosi accused Boehner of “sabotaging a good faith, bipartisan effort coming out of the Senate” and “wasting the public’s time.”

It wasn’t just Democrats who disagreed with the proposal — conservative members revolted, as did outside interest groups such as Heritage Action for America, which urged lawmakers to oppose it, and FreedomWorks.

Amid the bickering in Congress, the shutdown reached Day 16, just five days from tying the longest shuttering on record.

President Barack Obama, meanwhile, laid low at the White House, delivering no public remarks about the ongoing stalemate.

And financial markets at home and around the world grew jittery awaiting the potential calamity from a U.S. default.

Fitch Ratings on Wednesday put the nation’s coveted AAA credit rating — which allows the United States to borrow at better rates and affects the bond market — under review for a downgrade. “Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,” the rating agency wrote in a statement. A similarly nasty fiscal fight in 2011 prompted Standard and Poor’s to downgrade the U.S. rating from AAA to AA-plus. All three rating agencies have now warned against letting the debt ceiling top out.

Treasury Secretary Jack Lew has warned repeatedly that with just $35 billion in cash left on hand, the nation’s borrowing limit will be exhausted come Thursday. Is that at midnight? Some other configuration? And does it matter with the markets watching warily?

White House Press Secretary Jay Carney bristled during the press briefing Tuesday when presented with arguments that the exact timing of a default isn’t precise.

“The deadline for … avoiding uncertainty has passed. The deadline for not shutting the government down has long since passed. So Congress has already failed to act in a timely fashion,” Carney told reporters.

The BBC has a handy video explainer about how a default would look.

Lew will huddle with Mr. Obama and Vice President Joe Biden at the White House Wednesday. The New York Times’ Jackie Calmes examined the president’s role in the fight, and lessons he learned after negotiating with the GOP in 2011 over the debt ceiling.

On the NewsHour Tuesday, we rounded up the latest developments at got at the internal GOP divisions by talking with Politico’s Carrie Budoff Brown. Watch the segment here or below:


The NewsHour will be tracking Congress’ progress all day. Keep an eye on the Rundown blog for breaking news, follow @NewsHour for the latest and tune in Wednesday night.

LINE ITEMS

  • The Associated Press looks at thousands of federal workers who have been called back to work despite the shutdown.

  • State Sen. Katherine Clark prevailed in the Massachusetts Democratic primary Tuesday, and likely will cruise to a general election victory in the contest to replace Ed Markey, who won John Kerry’s Senate seat earlier this year.

  • That contest is followed Wednesday by New Jersey’s special Senate election to replace the late Sen. Frank Lautenberg, a Democrat. Newark Mayor Cory Booker is favored to win his race against Republican Steve Lonegan.

  • NewsHour web producer Simone Pathe looked at Booker’s path to victory.

  • Roll Call’s Emily Cahn and Kyle Trygstad have more on the special election frenzy that kicked off this week.

  • The Associated Press’ Steve Sztotak reports that an assistant state attorney general “improperly advised two energy companies in a natural gas drilling royalty fight against southwest Virginia landowners, but she did so without her supervisor’s knowledge,” putting scrutiny on gubernatorial nominee Attorney General Ken Cuccinelli.

  • The Washington Post’s Paul Schwartzman profiled Cuccinelli’s Democratic rival Terry McAuliffe and notes many of his sentences end with a seemingly “sunny exclamation point.” Did you know he started a driveway-sealing business as a teenager?

  • In a debate Wednesday, New Jersey Gov. Chris Christie talked about how he would react if one of his four children came out as gay, and added that he believes “marriage is between one man and one woman.” His rival, state Sen. Barbara Buono, has an openly gay daughter.

  • Federal Housing Finance Agency nominee Rep. Mel Watt, whose confirmation has stalled in the Senate, reported raising just $10 for his suspended campaign account in the third quarter. The North Carolina Democrat told Roll Call he was surprised by the 10-spot. “Somebody didn’t get the message I guess.”

  • Phil Rucker writes for the Washington Post front page about Hillary Clinton’s many award ceremonies.

  • Former Congressman and disgraced ex-San Diego Mayor Bob Filner pleaded guilty Tuesday to false imprisonment and battery. The surprising charges came not long after he resigned from the city following a string of sexual harassment allegations. His lawyers struck a plea deal that would bar him from ever seeking or holding public office again.

  • Shutdown effects are spilling into Arlington Cemetery, but officials there are scrapping their rule about leaving mementos. Politico looks at the fervor from veterans upset by the closure of open-air memorials.

  • Boehner might be having a hard time politically, but he’s still a good fundraiser.

  • The Supreme Court will hear a case on greenhouse gases.

  • The Republican Senate primary in Alaska is getting crowded.

  • Roll Call’s Emily Cahn reports that Kentucky Secretary of State Alison Lundergan Grimes, a Democrat hoping to challenge McConnell, outraised him in the third quarter, “raking in an impressive $2.5 million.”

  • Mike Huckabee told David Brody he is pondering a 2016 presidential bid.

  • Traffic is down in the third week of the health care exchanges, the Washington Post reports.

  • BuzzFeed’s Ben Smith scooped that Glenn Greenwald is leaving The Guardian to work at a new news outlet.

  • Rep. Debbie Wasserman Schultz, D-Fla., is out with a new book called “For the Next Generation.”

  • The New York Post prints some anonymous gossip claiming a Republican member of Congress had “one long, hot bathroom break.”

  • NBC Producer Frank Thorp snapped this pic of Rep. Steve Stivers, R-Ohio, giving a tour of the rotunda to eighth graders from Columbus.

  • Candidate-turned-film studio CEO Rick Santorum has a Christmas movie called “The Christmas Candle” coming out in November. Here is its trailer.

  • A D.C. nonprofit staffer convinced a mugger not to rob her on Capitol Hill when she told him the National Security Agency would track her cell phone.

  • Hillary Clinton’s car got an £80 parking ticket in London.

NEWSHOUR: #notjustaTVshow

  • Cindy Huang spoke with veterans who are frustrated by the memorials being closed on the National Mall.

  • The NewsHour took an in-depth look at an affirmative action case before the Supreme Court. We discussed the day’s arguments with Marcia Coyle of the National Law Journal and then fielded a debate between Columbia University President Lee Bollinger and Joshua Thompson of the Pacific Legal Foundation. Watch here or below:


  • Paul Solman teaches us about the bond market and the debt ceiling limbo.

  • Ray Suarez had a conversation with the Washington Post’s David Nakamura about the latest Medal of Honor winner.

  • NewsHour co-founder Jim Lehrer wrote a novel about the Kennedy assassination he reported on 50 years ago. Judy Woodruff recently talked to Jim about the book. Watch that here or below:


TOP TWEETS

Katelyn Polantz contributed to this report.

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Questions or comments? Email Christina Bellantoni at cbellantoni-at-newshour-dot-org.

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