Senate leads hunt for shutdown deal

2013-10-13 19:54
(Jewel Samad, AFP)

(Jewel Samad, AFP)

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Washington - Senators looked to party leaders on Sunday to devise a plan that would reopen the government and steer clear of a potential default this week, saying it's unthinkable that political obstinacy would prevent the United States from paying its bills.

With House leaders sidelined, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell have taken the lead on discussions in the fiscal crisis. That raised the level of optimism among some senators that a deal could be reached even as Reid has said there was a "long ways to go" and few details on the leaders' talks have emerged.

"It's a breakthrough. Hard to imagine, but it's a breakthrough," said Senator Dick Durbin, the No 2 Senate Democratic leader, on NBC's Meet the Press.

Republican Senator Rob Portman predicted a short-term solution could be reached. "We will figure it out," Portman said.

The US government has been partially shut since 1 October because of Congress's 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.

Sunday marked the 13th day of a federal shutdown that has continued to idle 350 000 government workers, left hundreds of thousands of others working without pay and curtailed everything from veterans' services to environmental inspections.

Last week, the effects of the shutdown reached businesses, such as concessions and hotels near federal parks, that depend on government programmes.

More ominously, Thursday's deadline to raise debt ceiling drew another day closer, the day the Obama administration has warned the US will deplete its borrowing authority and risk an unprecedented federal default.

Economists say that could send shockwaves throughout the US and beyond.


Amid meetings in Washington of world finance officials, the International Monetary Fund's policy committee said the US needs to take "urgent action" to address the impasse.

World Bank President Jim Yong Kim stressed the urgency for Washington policymakers to reach agreement on raising the debt ceiling before the Thursday deadline set by Lew, saying the economic fallout of failing to act could include increased interest rates, slower global economic growth and falling business confidence.

Such an outcome, he said, would have a "disastrous impact" on poor nations.

The pressure was on both parties but seemed mostly on Republicans, who polls show are bearing the brunt of voters' wrath over the twin standoffs. And though the financial markets rebounded strongly late last week on word of movement in the talks, lawmakers of both parties were warily awaiting their reopening this week to another impasse.

Republicans are demanding spending cuts and deficit reduction in exchange for reopening the government and extending its borrowing authority. Obama and other Democrats say they want both measures pushed through Congress without condition and would agree to deficit reduction talks afterward.

Though the Senate was leading the search for a deal, the House of Representatives and its fractious Republicans remained a possible headache in the coming week.

"I think at this point we've got to figure out a way to get something out of the Senate that we think is close enough for the House to accept," Republican Senator Bob Corker said on Fox News Sunday.

House Speaker John Boehner told Republican lawmakers early on Saturday that his talks with the president had ground to a halt.

Also sidelined, at least for now, was a plan forged by moderate Republican Senator Susan Collins and a bipartisan coalition to briefly fund the government and extend the $16.7 trillion debt limit, in exchange for steps like temporarily delaying the medical device tax that helps fund Obama's signature health care law.

Democrats said Collins' plan curbed spending too tightly, and Reid announced on Saturday it was going nowhere.

Collins said on Sunday that both Democrats and Republicans continue to offer ideas and say they want to be part of the group working to reopen the government and address the debt ceiling before Thursday's deadline.

"We're going to keep working, offering our suggestions to the leadership on both sides of the aisle in an attempt to be constructive and bring this impasse to an end. Surely we owe that to the American people," Collins said on CNN's State of the Union.

Democratic Senator Amy Klobuchar said she sees the Collins plan and the fact that the Senate leaders are talking as a positive step going forward.

"We need that right now," she said, adding that while Reid wouldn't accept everything in the Collins plan, "he knows there are some positive things in that plan", such as opening the government in a "smart time frame" not defaulting on debt and doing something in the long term on the budget.

Senate Republicans dealt Democrats an expected setback on Saturday by derailing a Democratic measure extending the debt limit through 2014 without any conditions.

The vote was 53-45 to start debating the Democratic measure - seven short of the 60 votes needed to overcome Republican obstruction tactics.

Obama met on Saturday with Senate Democratic leaders at the White House after accusing Republicans of practicing the politics of extortion. "Manufacturing crises to extract massive concessions isn't how our democracy works, and we have to stop it," Obama said in his weekly radio and Internet address.

The shutdown, meanwhile, has sent ripples nationwide.

Own funds

The White House, drawing attention to the effects of the partial shutdown on government research, noted that four of five Nobel Prize-winning scientists working for the federal government had to be furloughed. It said two-thirds of the employees at the Centres for Disease Control have had to stay home.

At the same time, some states have begun putting up their own funds to temporarily reopen national parks after the Obama administration gave them permission to do so without promising any reimbursement.

The states want to stem the loss of tourist money that flows when the scenic attractions are open.

Tourists returned to the Grand Canyon in Arizona on Saturday, and the Statue of Liberty in New York reopened to the public on Sunday.

Read more on:    us  |  us economy

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