WASHINGTON — Rank-and-file senators on Wednesday morning will review a deal to reopen the government and extend its borrowing authority. Aides to the Democratic and Republican Senate leaders worked on the proposal through the night.
The deal is likely to be announced by midday, when the Senate formally opens for business, aides said on Wednesday morning. The government would be financed at tight levels through Jan. 15, reflecting across-the-board spending cuts that went into effect in March. The debt ceiling would be raised into February, and negotiators would be required to complete work on a detailed budget plan for the next decade by Dec. 13.
The only concession to the movement to gut President Obama’s health care law is a mild tightening of income verification rules for people obtaining subsidized health insurance on the new insurance exchanges. Even any alteration of the law’s tax on medical devices -- hated by members of both parties -- was removed from the final deal.
Whether it can pass ahead of Thursday’s deadline for a possible default on government obligations will depend on those senators who have sought to link further financing of the government to defunding the health care law. Senators from both parties were leaning on Senators Ted Cruz, Republican of Texas, and Mike Lee, Republican of Utah, to agree to fast-track the deal to a final vote.
If Senator Harry Reid of Nevada, the majority leader, and Senator Mitch McConnell of Kentucky, the Republican leader, reach a final accord, Senate leaders expect to use a parliamentary maneuver that will allow the majority leader to quickly move the deal to the Senate floor on Wednesday. With unanimous consent, a final vote would come the same day. But if Senate hard-liners object, the Senate would have to wait until Friday, then muster 60 votes to cut off debate. Further obstruction would mean the final vote would happen Saturday, when the bill would go back to the House, where it would pass only if it had overwhelming Democratic support, since many Republicans would not vote for it.
With so little time left, chances rose that a resolution would not be approved by Congress and sent to Mr. Obama before Thursday, when the government is left with only its cash on hand to pay the nation’s bills.
“It’s very, very serious,” Senator John McCain, Republican of Arizona, warned on Tuesday. “Republicans have to understand we have lost this battle, as I predicted weeks ago, that we would not be able to win because we were demanding something that was not achievable.”
Tuesday was supposed to bring Washington to the edge of resolving the fiscal showdown, but instead there was chaos and retrenching. And a bitter fight that had begun over stripping money from the president’s signature health care law had essentially descended in the House into one over whether lawmakers and their staff members would pay the full cost of their health insurance premiums, unlike most workers at American companies, and how to restrict the administration from using flexibility to extend the debt limit beyond a fixed deadline.
Even so, the House speaker, John A. Boehner, Republican of Ohio, and his leadership team failed in repeated, daylong attempts to bring their troops behind any bill that would reopen the government and extend the Treasury’s debt limit on terms significantly reduced from their original push against funding for the health care law. The House’s hard-core conservatives and some more pragmatic Republicans were nearing open revolt, and the leadership was forced twice to back away from proposals it had floated, the second time sending lawmakers home for the night to await a decision on how to proceed Wednesday.
“We’re trying to find a way through it,” said Representative Greg Walden of Oregon, the chairman of the National Republican Congressional Committee, emerging from Mr. Boehner’s office to announce that no votes would be held Tuesday night.
The House setback returned the focus to the Senate, where the leadership had suspended talks after the Senate Republican leadership opted to give the House a chance to produce an alternative to the Senate measure taking shape.
Given the progress that had been made in the Senate, Congressional Democrats and officials at the White House criticized Mr. Boehner’s move on Tuesday as an attempt to sabotage the bipartisan Senate talks even as they seemed to be nearing an agreement.
Initially, Mr. Boehner proposed a bill to reopen the government until Jan. 15, extend the debt ceiling until Feb. 7, delay a tax on medical devices two years and deny members of Congress, the president, the vice president and White House political appointees taxpayer subsidies to help buy insurance on President Obama’s health insurance exchanges.
“We’re trying to find a way forward in a bipartisan way that would continue to provide fairness to the American people under Obamacare,” Mr. Boehner said as he acknowledged “there are a lot of opinions” among his rambunctious members.
By Tuesday afternoon, House Republican leaders were back with a new proposal to fund the government through Dec. 15, extend the debt ceiling into February and deprive not only lawmakers but all their staff members of employer assistance to buy their health care. By extending that provision to staff members, Republican leaders hoped to appeal to its far-right flank, but it angered more moderate Republicans and was not enough for the conservative hard core.
Complicating the speaker’s task, Heritage Action, the conservative Heritage Foundation’s political arm, which wields great influence with the most conservative elements of the Republican Party, opposed the plan.
“I think there’s always hope there can be a final package I can vote on, but this is not the one,” said Representative Ted Yoho, Republican of Florida, as he and two other Tea Party conservatives left the speaker’s office.
Republican leaders had initially hoped the loss of members like Mr. Yoho could be made up with support from Democrats. But Democratic leaders made it clear they would offer no assistance. Democrats latched on to a provision in the House proposals that would have forbidden the Treasury to juggle government accounts — so-called extraordinary measures — to meet obligations beyond a debt-ceiling deadline.
In the midst of the turmoil, the credit rating agency Fitch put the United States on a “negative ratings watch,” warning that Congressional intransigence has put the full faith and credit of the government at risk.
The news came as the Treasury Department said it had only about $35 billion in cash on hand. It expects to run out of “extraordinary measures” to keep on paying all of the government’s bills on Thursday, at which point outgoing payments might exceed that cash, plus any revenues, on any day going forward.
As the United States nears default, investors have demanded more compensation for lending to the government, with yields on short-term debt spiking to their highest levels in years.
Fitch warned that Congress has not “raised the federal debt ceiling in a timely manner.” It said that it “continues to believe that the debt ceiling will be raised soon,” but that “political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.”
Annie Lowrey and Ashley Parker contributed reporting.
The deal is likely to be announced by midday, when the Senate formally opens for business, aides said on Wednesday morning. The government would be financed at tight levels through Jan. 15, reflecting across-the-board spending cuts that went into effect in March. The debt ceiling would be raised into February, and negotiators would be required to complete work on a detailed budget plan for the next decade by Dec. 13.
The only concession to the movement to gut President Obama’s health care law is a mild tightening of income verification rules for people obtaining subsidized health insurance on the new insurance exchanges. Even any alteration of the law’s tax on medical devices -- hated by members of both parties -- was removed from the final deal.
Whether it can pass ahead of Thursday’s deadline for a possible default on government obligations will depend on those senators who have sought to link further financing of the government to defunding the health care law. Senators from both parties were leaning on Senators Ted Cruz, Republican of Texas, and Mike Lee, Republican of Utah, to agree to fast-track the deal to a final vote.
If Senator Harry Reid of Nevada, the majority leader, and Senator Mitch McConnell of Kentucky, the Republican leader, reach a final accord, Senate leaders expect to use a parliamentary maneuver that will allow the majority leader to quickly move the deal to the Senate floor on Wednesday. With unanimous consent, a final vote would come the same day. But if Senate hard-liners object, the Senate would have to wait until Friday, then muster 60 votes to cut off debate. Further obstruction would mean the final vote would happen Saturday, when the bill would go back to the House, where it would pass only if it had overwhelming Democratic support, since many Republicans would not vote for it.
With so little time left, chances rose that a resolution would not be approved by Congress and sent to Mr. Obama before Thursday, when the government is left with only its cash on hand to pay the nation’s bills.
“It’s very, very serious,” Senator John McCain, Republican of Arizona, warned on Tuesday. “Republicans have to understand we have lost this battle, as I predicted weeks ago, that we would not be able to win because we were demanding something that was not achievable.”
Tuesday was supposed to bring Washington to the edge of resolving the fiscal showdown, but instead there was chaos and retrenching. And a bitter fight that had begun over stripping money from the president’s signature health care law had essentially descended in the House into one over whether lawmakers and their staff members would pay the full cost of their health insurance premiums, unlike most workers at American companies, and how to restrict the administration from using flexibility to extend the debt limit beyond a fixed deadline.
Even so, the House speaker, John A. Boehner, Republican of Ohio, and his leadership team failed in repeated, daylong attempts to bring their troops behind any bill that would reopen the government and extend the Treasury’s debt limit on terms significantly reduced from their original push against funding for the health care law. The House’s hard-core conservatives and some more pragmatic Republicans were nearing open revolt, and the leadership was forced twice to back away from proposals it had floated, the second time sending lawmakers home for the night to await a decision on how to proceed Wednesday.
“We’re trying to find a way through it,” said Representative Greg Walden of Oregon, the chairman of the National Republican Congressional Committee, emerging from Mr. Boehner’s office to announce that no votes would be held Tuesday night.
The House setback returned the focus to the Senate, where the leadership had suspended talks after the Senate Republican leadership opted to give the House a chance to produce an alternative to the Senate measure taking shape.
Given the progress that had been made in the Senate, Congressional Democrats and officials at the White House criticized Mr. Boehner’s move on Tuesday as an attempt to sabotage the bipartisan Senate talks even as they seemed to be nearing an agreement.
Initially, Mr. Boehner proposed a bill to reopen the government until Jan. 15, extend the debt ceiling until Feb. 7, delay a tax on medical devices two years and deny members of Congress, the president, the vice president and White House political appointees taxpayer subsidies to help buy insurance on President Obama’s health insurance exchanges.
“We’re trying to find a way forward in a bipartisan way that would continue to provide fairness to the American people under Obamacare,” Mr. Boehner said as he acknowledged “there are a lot of opinions” among his rambunctious members.
By Tuesday afternoon, House Republican leaders were back with a new proposal to fund the government through Dec. 15, extend the debt ceiling into February and deprive not only lawmakers but all their staff members of employer assistance to buy their health care. By extending that provision to staff members, Republican leaders hoped to appeal to its far-right flank, but it angered more moderate Republicans and was not enough for the conservative hard core.
Complicating the speaker’s task, Heritage Action, the conservative Heritage Foundation’s political arm, which wields great influence with the most conservative elements of the Republican Party, opposed the plan.
“I think there’s always hope there can be a final package I can vote on, but this is not the one,” said Representative Ted Yoho, Republican of Florida, as he and two other Tea Party conservatives left the speaker’s office.
Republican leaders had initially hoped the loss of members like Mr. Yoho could be made up with support from Democrats. But Democratic leaders made it clear they would offer no assistance. Democrats latched on to a provision in the House proposals that would have forbidden the Treasury to juggle government accounts — so-called extraordinary measures — to meet obligations beyond a debt-ceiling deadline.
In the midst of the turmoil, the credit rating agency Fitch put the United States on a “negative ratings watch,” warning that Congressional intransigence has put the full faith and credit of the government at risk.
The news came as the Treasury Department said it had only about $35 billion in cash on hand. It expects to run out of “extraordinary measures” to keep on paying all of the government’s bills on Thursday, at which point outgoing payments might exceed that cash, plus any revenues, on any day going forward.
As the United States nears default, investors have demanded more compensation for lending to the government, with yields on short-term debt spiking to their highest levels in years.
Fitch warned that Congress has not “raised the federal debt ceiling in a timely manner.” It said that it “continues to believe that the debt ceiling will be raised soon,” but that “political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.”
Annie Lowrey and Ashley Parker contributed reporting.