Senator: Deal reached to avoid default and open government

Senate leaders announced last-minute agreement Wednesday to avert a threatened Treasury default and reopen the government after a partial, 16-day shutdown. Congress raced to pass the measure by day's end.
Associated Press
Oct 16, 2013

The Dow Jones industrial average soared on the news that the threat of default was fading, flirting with a 200-point gain in morning trading.

"This is a time for reconciliation," said Senate Majority Leader Harry Reid of the agreement he had forged with the GOP leader, Sen. Mitch McConnell of Kentucky.

McConnell said that with the agreement, Republicans had sealed a deal to have spending in one area of the budget decline for two years in a row, adding, "we're not going back."

One prominent tea party lawmaker, Sen. Ted Cruz of Texas, said he would oppose the plan, but not seek to delay its passage.

That was a key concession that signaled a strong possibility that both houses could act by day's end. That, in turn, would allow President Barack Obama could sign the bill into law ahead of the Thursday deadline that Treasury Secretary Jacob Lew had set for action to raise the $16.7 trillion debt limit.

Officials said the proposal called for the Treasury to have authority to continue borrowing through Feb. 7, and the government would reopen through Jan. 15.

There was no official comment from the White House, although congressional officials said administration aides had been kept fully informed of the negotiations.

While the emerging deal could well meet resistance from conservatives in the Republican-controlled House, the Democratic Leader, Rep. Nancy Pelosi of California, has signaled she will support the plan and her rank and file is expected to vote for it in overwhelming numbers.

That raised the possibility that more Democrats than Republicans would back it, potentially causing additional problems for House Speaker John Boehner as he struggles to manage his tea party-heavy majority.

Boehner and the House Republican leadership met in a different part of the Capitol to plan their next move. A spokesman, Michael Steel, said afterward that no decision had been made "about how or when a potential Senate agreement could be voted on in the House."

The developments came one day before the deadline Lew had set for Congress to raise the current $16.7 trillion debt limit. Without action by lawmakers, he said, Treasury could not be certain it had the ability to pay bills as they come due.

In addition to raising the debt limit, the proposal would give lawmakers a vote to disapprove the increase. Obama would have the right to veto their opposition, ensuring he would prevail.

House and Senate negotiators would be appointed to seek a deficit-reduction deal. At the last minute, Reid and McConnell jettisoned a plan to give federal agencies increased flexibility in coping with the effects of across-the-board cuts. Officials said that would be a topic for the negotiations expected to begin shortly.

Despite initial Republican demands for the defunding of the health care law known as Obamacare, the pending agreement makes only one modest change in the program. It requires individuals and families seeking subsidies to purchase coverage to verify their incomes before qualifying.

There were some dire warnings from the financial world a day after the Fitch credit rating agency said it was reviewing its AAA rating on U.S. government debt for possible downgrade.

John Chambers, chairman of Standard & Poor's Sovereign Debt Committee, told "CBS This Morning" on Wednesday that a U.S. government default on its debts would be "much worse than Lehman Brothers," the investment firm whose 2008 collapse led to the global financial crisis.

Billionaire investor Warren Buffett told CNBC he doesn't think the federal government will fail to pay its bills, but "if it does happen, it's a pure act of idiocy."

Rep. Steve King, R-Iowa, a tea party favorite, said he was not worried about the prospect of a U.S. default.

"We are going to service our debt," he told CNN. "But I am concerned about all the rhetoric around this ....I'm concerned that it will scare the markets."

Aides to Reid and McConnell said the two men had resumed talks, including a Tuesday night conversation, and were hopeful about striking an agreement that could pass both houses.

It was expected to mirror a deal the leaders had neared Monday. That agreement was described as extending the debt limit through Feb. 7, immediately reopening the government fully and keeping agencies running until Jan. 15 — leaving lawmakers clashing over the same disputes in the near future.

It also set a mid-December deadline for bipartisan budget negotiators to report on efforts to reach compromise on longer-term issues like spending cuts. And it likely would require the Obama administration to certify that it can verify the income of people who qualify for federal subsidies for medical insurance under the 2010 health care law.

But that emerging Senate pact was put on hold Tuesday, an extraordinary day that highlighted how unruly rank-and-file House Republicans can be, even when the stakes are high. Facing solid Democratic opposition, Boehner tried in vain to write legislation that would satisfy GOP lawmakers, especially conservatives.

Boehner crafted two versions of the bill, but neither made it to a House vote because both faced certain defeat. Working against him was word during the day from the influential group Heritage Action for America that his legislation was not conservative enough — a worrisome threat for many GOP lawmakers whose biggest electoral fears are of primary challenges from the right.

The last of Boehner's two bills had the same dates as the emerging Senate plan on the debt limit andshutdown.

But it also blocked federal payments for the president, members of Congress and other officials to help pay for their health care coverage. And it prevented the Obama administration from shifting funds among different accounts — as past Treasury secretaries have done — to let the government keep paying bills briefly after the federal debt limit has been reached.

Boehner's inability to produce a bill that could pass his own chamber likely means he will have to let the House vote on a Senate compromise, even if that means it would pass with strong Democratic and weak GOP support. House Republican leaders have tried to avoid that scenario for fear that it would threaten their leadership, and some Republicans worried openly about that.

"Of all the damage to be done politically here, one of the greatest concerns I have is that somehow John Boehner gets compromised," said Sen. Lindsey Graham, R-S.C., a former House member and a Boehner supporter.

With the default clock ticking ever louder, it was possible the House might vote first on a plan produced by Senate leaders. For procedural reasons, that could speed the measure's trip through Congress by removing some parliamentary barriers Senate opponents might erect.

The strains of the confrontation were showing among GOP lawmakers.

"It's time to reopen the government and ensure we don't default on our debt," Rep. Jaime Herrera Beutler, R-Wash., said in a written statement. "I will not vote for poison pills that have no chance of passing the Senate or being signed into law."

Comments

Contango

Re: "who do you think will lead us to the land of milk and honey?"

Millions of private individuals making free market decisions.

Looking for a "white knight" is asking for authoritarian rule and tyranny ala F.A. Hayek's "The Road to Serfdom."

The Hero Zone's picture
The Hero Zone

There is no such thing as a utopia and any candidate who tells you they will deliver it to you is a liar. They may as well tell you that they will extend recess by 5 minutes and bring back $1/pizza slice at the cafeteria on Thursdays.

We can't look for others to do the job we ourselves must. The campaign taglines of "Yes we can" and "We're the ones we're waiting for" are very much true. Those who have been in Washington for almost their entire lives won't actually change things up because it threatens their comfy chairs, guaranteed pay, and inside knowledge of law that lets them walk away with millions from a job that only pays a bit over 100k.

So, the solution is to approach our state legislature (not even the governor) and have them begin crafting constitutional amendments to spread to the other states to ratify. This way we circumvent Congress and the President who don't want anything to change and WE tell THEM what WE want. Some suggestions below being:

1. Term limits for Congress.
2. Term limits for the Supreme Court.
3. Budget amendment that includes Tax Day being the Monday before Tuesday elections in November.
4. Repealing the 17th Amendment and restoring Senators being appointed by state legislators to represent the state in Federal government.

The ideas above I can go into much more detail if you'd like, but those are the gist. What are other ways we can wash out the parties?

1. Stop giving money and volunteer hours directly to the party.
2. Give the above instead to specific candidates whom you have researched and with whom you agree.
3. Actually research who is running for what office, especially in a primary. Just blindly voting for anyone with a certain letter after their name is lazy and leads us to the position we are in.
4. Until term limits are made, vote out the GOBs as both parties have them aplenty. So you don't think I am just picking on Democrats here I will hope our neighbors to the south give Senator McConnell another job when he is up for reelection.

Just wanting to (using stereotypes) "help people" as a Democrat or "repeal Obamacare" as a Republican isn't enough. You have to ask them how? Why? You must have them actually explain their reasons and motivations and not get caught up in the glamour and shimmer of catch phrases. We are at a point where "millions of Americans" will ALWAYS be affected by anything anyone does. 1% of our population is already three million.

You can't let candidates and officials get away with providing anecdotal evidence as the reason for doing something. There will always be a grandma in need, a young boy who needs a procedure, etc. but while their circumstances may be uniquely unfortunate you can't just change the rules for everyone else.

Most of all, meowmix, you have to have an open mind. You have to actually be willing to talk to others who may not agree with you and learn why they don't. During the last Presidential campaign I visited the President's reelection office twice despite the fact I tend to be more conservative. Why? Because the people there obviously were parting with their time and money enough to believe in someone that I didn't (not that Romney was much better, in fact I never visited his office). I had to know what people saw or expected of him. I was treated civilly there and while it didn't change my vote, I felt better for having confronted the source of many frustrations.

It's easier to call people names and dehumanize them. That way you don't have to feel guilty about what you say or a rampant bout of legislating/spending. After all, you oppose terrorists or animals - not compassionate human beings. So above all else, look at those who may disagree with you personally or your party of choice and challenge yourself to remember that they are human beings just like you with their own frustrations, concerns, fears, and motivations.

Stop It

+1!

Stop It

Very well stated, HZ. I reckon I'll print that for posterity if nothin' else. I tend to keep my statements blunt and short. But that certainly did not come across as blather or punditry.

Gardenman

Dear Hero Zone.

You maybe surprised but what you have to say I do not take as fluff or negative. What you desire and want is really waht most Americans want too. Unfortunately, what you want and hope to get is a dream. You desire what neither party is going to deliver to your door. The entire political system is ladden with all kinds of interest grups and self centered legislators. It is what it is.

You are not going to remove all the negative legislators who make their job a careerm although I to support term limits, or will you create a successful third party who meets our needs, or a host of other things you or many of us want. So what do we do?

We work with what we have and their are so many ways to do that. We just saw how one group of ultra conservatives took the path to close down the US Government and actually let the US default on it's bills. That shutdown caused pain and hardship to the very people they say they wanted to help. The idea to let the US defalt is utterly absurd and force this nation into a bleak economic futurs.

These ultra conservatives are the same principle as the manager of Kroger's saying I don't like some things we have to offer for sale in the store so I am locking the doors of the store. Yes, I am denying residents a place to buy food and hardship of getting to another store but until I get my way and these items removed I will keep the store closed. It might be said well that will put people out of work at Krogers and loss of tax dollars to city, county, state.....yes but until I get my way the store is closed.

The two parties are none too clean as you say but given the past few months in this issue the Republican party was way off the charts in solutions. Luckily, the Democrats and reasonable Republicans in Congress have prevailed and yes they kicked the can down the road a bit more. But let me ask would you have been happier had the can remained in place and you woke up this morning to all the consequences of a nation that has defalted on it'e debt?

Stop It

Give some of who care that "can" all of you say is getting kicked down the road. We will smash it and recycle it.

I'm tired of hearing about this *ghost can*. That thing must be made of titanium if it can take such abuse.

The two party system is either running out of leash or it will corral us all. It only has two sides. Them or us.

The Hero Zone's picture
The Hero Zone

Thank you for a reasonable reply as I really wasn't trying to be snarky or overly sarcastic. That accomplishes nothing constructive. But last night I just hit a breaker after reading so many comments about how one party is supposedly superior to the other that things like increasing our debt by a trillion dollars is seen as responsible leadership.

I agree there are special interests and such and that the current crop of Republicans and Democrats are unwilling to change things. They are alcoholics who haven't admitted they have a problem yet. Relying on them to change the very system they are a part of would be absurd. That is why we as constituents must do it for them. My reply to meowmix has ways to accomplish that if you, too, are upset at leadership (especially within the Democrat party).

I will counter your default statement again by saying that it takes a willing act of the President to default us. He has to choose to not pay the principle and interest on our debt to do that. We take in ten times more per day than we owe on those two items so his threats to do so either show his ignorance of his own power and oath to uphold the constitution or he actually was going to, despite the resources of not having to, default willingly. Please keep that in mind and wonder why very few if any leaders actually explained that to us. Please wonder why we are constantly kept in "crisis mode" and see just what is slipped into legislation that kicks the can a bit more.

While the solutions that Republicans have put out may seem off the charts have yet to hear a single solution from a Democrat. What is their plan? How are they tackling our massive debt? Our overextended Congress? I have heard nothing from them except more of the same, encouraging the status quo, and the like. Why can't the Democrats actually address issues or have an "ultra" faction of their own who actually want to get things done instead of continually passing pork-laden CRs?

What would have made me happy? Actually having our elected leaders sit down and figure out a budget. To have them explain where our money is going and why. Everything is seemingly kept in a big rush so that everything can get squeezed through without question or with the plausible excuse of "we had to do something, it may not be perfect or something got slid in but we'll fix it for next time - promise!".

Look at the $2.2 billion the Republican senator got for his state with this CR. Look at the nearly $200k going to the widow of a Democrat multimillionaire Senator. "Oops, how'd those get in there? Ah well, we promise to form a budget committee to work out stuff later."

Is that any way to govern? Why do I feel like we are subjects of them instead of them being public servants to/for us? Why are very few people in Congress or the President actually explaining things and instead rushing everything in closed meetings, etc.? We must be too dumb to understand things, according to their behavior. It must be a waste of time to actually explain what is going on factually.

Do you see my frustration? Do you see WHY I'm upset with both parties? One is offering absolutely no solutions and/or more of the same behavior that got us to this brink in the first place and the other is closing the store as you say. So which Kroger manager's position is better? Continue to let people steal heavily from the store or shut it down entirely to look at where the problem is?

Ok...I'm done. I'm hitting another wall of frustration and I know when to fold 'em.

Again, thank you for the reply.

Stop It

This cliche has GOT TO GO.

" It is what it is. "

Stop It

ROTFFLMFAO!!!

coasterfan

Darwin: Sorry to hear about your new machine which causes smoke to blow up your arse. This must have caused you quite a headache.

The real ACA, of course, offers a lot more than an aspirin and a bandaid, so your joke, while funny, is not based on fact/truth at all. Hey, where can I get one of the "It's Bush's Fault" yard signs? Most people know that already, but it would be a helpful reminder to conservatives who are still in denial about it.

Please forward all unemployment applications to Mr. Bush, since it was his recession that completely killed the jobs market. Please also send some to the Republican House, who have refused to sign any of Obama's jobs creation bills. Free cellphones should also go to Mr. Bush, since it was he who instituted the program, not Obama. Food stamps? Bush, again, since the recession and job losses caused more people to need them (you do understand how 'cause and effect' works, right?)

Finally, 'tax the rich' would be nice. Fifty years ago, they paid more than double the tax rate they currently pay. America enjoyed a time of great prosperity back then. That all changed when Reagan took office. Now we have a 1% who makes 430x as much as the rest of us, and they contribute little to society - they don't create jobs, they just hoard their wealth and silently chuckle while stupid middle-class conservatives cheer them on.

Over the past few weeks, Republicans have pretty much proven that they are not fit to lead anything. To steal one of the more silly GOP taglines, "How's that Palin-Romney-Cruz-Ryan thing workin' out for ya?"

Darwin's choice

Typical Obamabot troll reply! I knew anything said joking about your leader would bring you, and gardenman, out pounding the keyboard! It won't matter though, Obama has failed.

Contango

Re: "Fifty years ago, they paid more than double the tax rate they currently pay."

Not with deductions. A fallacy.

Contango

Re: "The real ACA, of course, offers a lot more than an aspirin and a bandaid,"

As a member of a protected health care class with health & welfare benefits GUARANTEED by OH taxpayers, you have little to no standing on the issue.

When you sign up for Obama☭are perhaps your screeds will become more credible.

coasterfan

Actually, I don't have my healthcare provided for by Ohio taxpayers. I cashed in my teacher's retirement to pay divorce lawyer fees some years ago. I am part of the private workforce and pay for my own health care through my current employer.

So, I DO have 100% credibility on this issue, and once again, dear Contango, you're wrong. Please do us all a favor and take your dying teaparty ideas and sour grapes elsewhere. Your opinion is a minority opinion, and your team lost yet another battle because of that.

By the way, if you're going to bring up an issue, tell the WHOLE story. Teachers DO pay a goodly sum out of pocket for their healthcare. My wife is a teacher, and roughly 15% of her takehome income each year goes to pay for her single payer plan - after her employer pays their portion.
They also get paid a lot less than those in other fields who have 1-2 college degrees. AND they have to put up with idiots like you, who devalue them at any opportunity. Teachers and public employees aren't the problem, dude.

If you want to talk about a REAL problem, here's one: we all are paying roughly $2000 per year in higher premiums to cover the cost of treating the uninsured. I know, I know. You'd rather pay that, instead of waiting to see if Obamacare will work. Republicans, of course, are only able to learn after peeing on the electric fence.

Contango

Re: "My wife is a teacher,"

Then you're eligible for dependent health and survivor welfare benefits through her.

Still sucking on the OH taxpayer's teat.

--------------

Re: "we all are paying roughly $2000 per year in higher premiums to cover the cost of treating the uninsured."

And ACA AIN'T the solution is it?

deertracker

They don't just pee on the electric fence, they sit down to pee on the electric fence!

Stop It

I gotta say, I'm not on either side of this POS 2 party system. They are the same creature with cause to disturb and rake in the cash. I do love some of the jabs made, though. Creativity and a keyboard can and will cause laughter.
There are a few that just use ad hominems to "try" and make a point and anyone who reads the comment sections well know who they are.

Just gotta laugh at times. Beats crying. :)

Whoopball

Kudos to Kaptur for voting to maintain the full faith and credit of our country. Shame on Jordan and Latta for voting against the bill to meet our obligations. Irresponsible legislators like these don't deserve reelection.

Contango

Re: "maintain the full faith and credit of our country,"

And at the current rate of borrowing, taxing, printing and spending, how long do you figure that it will be "maintained"?

meowmix

truly....Whoopball!

Whoopball

double post

meowmix

Gardenman-- they have blinders on because when all you do is listen to conservative talk radio you somehow delude yourself into thinking there is a vast silent majority of people out there who think the same way. In reality, it is quite the other way around. There are a number of apolitical people out there who may not express themselves on a forum like this but in no way, shape or form do they support those that align with the tea party. They realize change is needed to keep this country up and running, they realize this is the 21st century--not the 1950's. Quite frankly, I think the tea party appeals to those who feel they have somehow been cheated out of their American dream and wants to blame everyone but themself. They scream about the US doling out tons of money for foreign aid and scream about aid to the poorest of our citizens--but hasn't a care that this shut down has cost $24 BILLION dollars thanks to Cruz and his ilk. Pathetic.

The New World Czar

Where are you getting $24 billion and explain how it is the fault of Ted Cruz- without relying on a political website or TV network.

meowmix

$24 billion.
That’s according to an estimate from Standard & Poor’s. The financial services company said the shutdown, which ended with a deal late Wednesday night after 16 days, took $24 billion out of the U.S. economy, and reduced projected fourth-quarter GDP growth from 3 percent to 2.4 percent.

Contango

Re: "took $24 billion out of the U.S. economy,"

Govt. can ONLY spend dollars which it takes from somewhere else.

It would be like you giving $5.00 to your kid and saying that your household grew by $5.00.

The formula for GDP is:

GDP = C + I + G + (Ex - Im)

* C = total spending by consumers
* I = total investment (spending on goods and services) by businesses
* G = total spending by government (federal, state, and local)
* Ex - Im) = net exports (exports - imports)

Stop It

That's not a formula, it's an equation. It falls flat when the crap hits the fan.

deertracker

Any more questions New World....?

The New World Czar

Sure. Again, how is this the fault of Ted Cruz?

Oh, that's right...Obamacare is going to save us $100 billion and create millions of jobs, lollipops, puppy dogs, and unicorns.

Contango

Re: "They realize change is needed to keep this country up and running,"

It's "Hope & Change."

So what kind of "change" are you looking for?

More of the same, printing, borrowing, taxing and spending until we reach true socialism or economic collapse (whichever comes first)?

deertracker

The man said..."win an election if you want change". What change are you looking for?

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