Republican chaos, House effort flops

2013-10-16 15:57
The US Capitol building at dusk in Washington. (Evan Vucci, AP)

The US Capitol building at dusk in Washington. (Evan Vucci, AP)

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Washington - Chaos among Republicans in the House of Representatives has left it to bipartisan leaders in the Senate to craft a last-minute deal to fend off a looming US default and to reopen the federal government as a partial shut-down entered its 16th day.

Aides to Senate Democrat Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell said the leaders resumed talks on Tuesday night and voiced optimism about striking an agreement on Wednesday that could pass both houses of Congress and reach President Barack Obama's desk before Thursday, when the US Treasury says it will begin running out of cash.

Driving the urgency was not only the calendar but also fears that financial markets would plunge without a deal. Looking forward, lawmakers were also concerned voters would punish them in next year's congressional elections. Polls show the public more inclined to blame Republicans.

"People are so tired of this," Obama said on Tuesday in an interview with Los Angeles TV station KMEX.

The shut-down began on 1 October after House Republicans refused to accept a temporary funding measure to provide the money to run the government unless Obama agreed to defund or delay his health care overhaul law. House Republicans also refused to move on needed approval for raising the amount of money the Treasury can borrow to pay US bills.

The hard-right tea party faction of House Republicans, urged on by conservative Texas Republican Ted Cruz in the Senate, has seen both deadlines as a weapon to get their way on gutting the health care overhaul, designed to provide tens of millions of uninsured Americans with coverage.

The White House refused to abandon Obama's signature legislative achievement, and the Democratic-controlled Senate rejected legislation to achieve the Republicans' goal.

House Republicans have since dropped their demands to gut the health care law known as Obamacare. But Congress still struggles to pass two measures that are normally routine: an emergency funding bill to keep the government running and legislation to raise the $16.7-trillion borrowing limit.

With prospects for a deal still uncertain, the Fitch rating agency in New York warned that it was reviewing the government's AAA credit rating for a possible downgrade, though no action was near. The firm, one of the three leading US credit-ratings agencies, said that "the political brinkmanship and reduced financing flexibility could increase the risk of a US default."

Bipartisan budget

Stock markets gave negative reviews as well, with the Dow Jones industrial average and Standard & Poor's 500 index both dropping Tuesday by nearly 1%. Most global stock markets edged lower on Wednesday following the previous day's retreat on Wall Street,

According to Treasury Secretary Jacob Lew, unless Congress acts by Thursday, the government will lose its ability to borrow and will be required to meet its obligations relying only on cash on hand and incoming tax receipts.

A deal that comes out of the Senate talks was expected to mirror a deal the leaders had nearly reached on Monday. That agreement was described as extending the debt limit through 7 February, immediately reopening the government fully and keeping agencies running until 15 January - leaving lawmakers clashing over the same disputes early in the new year.

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 probably would require the Obama administration to certify it can verify the income of people who qualify for federal subsidies for medical insurance under the 2010 health care law.

The emerging Senate pact was put on hold on 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, House Speaker John Boehner tried in vain to write legislation that would satisfy Republican lawmakers, especially hardcore conservatives in the tea party caucus.

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 conservative group Heritage Action for America that his legislation was not conservative enough - a worrisome threat for many Republican lawmakers whose biggest electoral fears are of primary election challenges from the right.

Primary votes determine which candidate makes it to the ballot for general elections.

Heritage Action said Boehner's proposal "will do absolutely nothing to help Americans who are negatively impacted by Obamacare".

The last of Boehner's two bills had the same dates as the emerging Senate plan on the debt limit and shut-down. It also blocked federal payments for the president, members of Congress and other officials to help pay for their health care coverage. 

Threaten positions

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 for weeks after the federal debt limit has been reached.

Boehner's inability to produce a bill that could pass his own chamber probably means he will have to let the House vote on a Senate compromise, even if that means it would rely heavily on minority Democrats to pass, an awkward and risky position for a Republican speaker.

House Republican leaders have tried to avoid that scenario for fear that it would threaten their leadership positions.

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

Republicans in the Senate, who must be elected on a state wide basis rather than in smaller congressional districts drawn up to secure a Republican advantage, were eager to end the partial government shut-down and avoid an even greater crisis if the government were to default.

The shut-down, the first in 17 years, has furloughed more than 400 000 federal workers.

Read more on:    republicans  |  john boehner  |  us  |  us budget

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