The fiscal showdown in Washington entered its final stages as the House and Senate prepared competing plans that would end the 15-day-old government shutdown and prevent the U.S. from missing promised payments.
Both plans would fund the government through Jan. 15, 2014 and suspend the U.S. debt limit until Feb. 7. As the differences narrow between the parties, the House vote will show whether Republicans are willing to raise borrowing authority and end the shutdown without major changes to the 2010 health-care law.
It moves the ball forward, Representative Charlie Dent, a Pennsylvania Republican, said today after meeting with party leaders.
The House proposal goes beyond the Senate with two smaller changes to the health care law. It would delay for two years a medical-device tax and prevent the government from contributing to the health insurance of members of Congress, the president, the vice president and the Cabinet.
The House plan falls far short of Republican efforts last month to defund or delay major pieces of the 2010 health law. Speaker John Boehner told Republicans today the approach was the chambers only possible strategy to respond to the emerging Senate deal that he described as a hand grenade being lobbed at the House, said two lawmakers who spoke on condition of anonymity to discuss the private meeting.
White House spokeswoman Amy Brundage in a statement today said Obama has repeatedly said that lawmakers dont get to demand ransom for fulfilling their basic responsibilities to pass a budget and pay the nations bills, saying thats what the House Republican proposal does.
There are obstacles, including the disagreements between the Senate and the House. Additionally, some House Republicans may oppose Boehners plan because it doesnt go far enough in changing the health law. Furthermore, senators opposed to the deal may stall a final vote.
The emerging contours of an agreement would stave off a potential default, open shuttered federal services and change the immediate deadlines in favor of three new ones over the next four months, including a Dec. 13 target date for a budget conference between the House and Senate.
There are productive conversations going on with the Republican leader, Senate Majority Leader Harry Reid said today on the Senate floor, adding that he was confident a comprehensive deal could be reached this week to avoid a catastrophic default.
Reid has been working with Senate Minority Leader Mitch McConnell of Kentucky.
U.S. lawmakers, who have governed from fiscal crisis to fiscal crisis for more than two years, may be setting up more crises in the near future. The agreement would delay the next major deadline -- the Jan. 15 lapse in government funding -- until after the holiday shopping season.
Benchmark Treasury 10-year yields rose two basis points, or 0.02%age point, to 2.71% at 10:48 a.m. New York time, according to Bloomberg Bond Trader prices. The rate touched 2.74%, the highest since Sept. 23.
The Stoxx Europe 600 Index gained 0.7% at 9:20 a.m. in New York in the longest winning streak in two months. The Standard & Poors 500 Index fell 0.3% to 1,705.56 at 11:06 a.m.
There is a potential obstacle to a Senate agreement. A single senator would be able to use procedural tactics to push a final vote past the Oct. 17 lapse in borrowing authority.
If the House votes tonight, the Senate would be able to pass its plan no later than Oct. 18, before the government starts missing promised payments. The U.S. will have enough cash and income revenue to avoid missing payments until Oct. 22 at the earliest, according to the Congressional Budget Office.
Texas Republican Senator Ted Cruz, who spoke for more than 21 hours during a budget debate last month, wouldnt rule out stalling maneuvers, saying he wants to see the details of the plan.
The House Republican alternative would prevent the government from making any employer-side contribution to the health insurance of members of Congress, the president, the vice president and the cabinet.
Obama has insisted that Congress raise the $16.7 trillion U.S. debt limit without add-ons and that stopgap spending bills be free of policy conditions.
The emerging Senate agreement again put pressure on Boehner, who has a 232-200 Republican majority. He may have to decide whether to side with hardliners insistent on changes to Obamacare or rely on Democratic votes to pass a bipartisan Senate plan through the House.
Reid and McConnell may release their plans details as early as today, after conversations that started over the weekend. Democrats want as long a debt-limit increase as possible and as short a government funding extension at Republican-preferred levels. Republicans want the opposite.
House Democratic leaders are scheduled to meet at the White House with Obama at 3:15 p.m. today.
Possible sticking points to a Senate deal late yesterday included whether Democrats would agree to Republican demands that the Treasury Department be barred from using so-called extraordinary measures to extend the debt-limit deadline after Feb. 7. Such maneuvers pushed forward the deadline for five months this year, though its not clear how much time they would buy in 2014.
Obama spoke with McConnell yesterday and said the administration wants flexibility for the Treasury Departments borrowing, according to a person familiar with the conversation who requested anonymity to describe private discussions.
The House proposal would bar the extraordinary measures.
Yesterdays version of the Senate plan would postpone a reinsurance fee the government is levying on health plans for the first three years of the health-care exchanges -- amounting to $63 a worker next year, said the person familiar with the talks. Labor unions, aligned politically with Democrats, have asked for the delay.
That provision and a provision sought by Senate Republicans on verifying the income of those receiving subsidies may both get dropped, said a person familiar with the Senate talks, speaking on condition of anonymity to discuss the private conversations.
Democrats could claim that the Senate agreement is a trade of health-law measures favored by each party that just happens to be linked to a debt-ceiling increase and spending bill free of policy conditions. Republicans could say they got health-law changes attached to the must-pass measures.
The Senate agreement also would give federal agencies flexibility to manage the across-the-board spending cuts known as sequestration if they occur in 2014.
The partial government shutdown began Oct. 1 after Republicans insisted on changes to the 2010 Patient Protection and Affordable Care Act. Backed by Cruz, they started with a plan to defund the law and ended up seeking a one-year delay of the requirement for individuals to purchase health insurance.
Obama and Democrats resisted, and the president said that Republicans were trying to extract a ransom just for doing their jobs. After a 2011 agreement that produced more than $2 trillion in spending cuts, Democrats are trying to use the fiscal impasse to set a precedent against future negotiations set against the backdrop of default.
An ABC News/Washington Post poll found that 74% of Americans disapprove of how Republicans have been handling the fiscal impasse, compared with 53% who disapprove of Obamas approach.
The lack of significant health-law changes in the Senate agreement is causing concerns for some House members.
Representative Charles Boustany, a Louisiana Republican, said party leaders will have a hard time gaining support from a number of House Republicans because of the lack of Obamacare features in the Senate proposal.