Updated Oct. 15, 2013 2:29 p.m. ET
WASHINGTON—The way out of a budget standoff that threatens to trigger a debt crisis later this week was clouded Tuesday as the House and Senate worked on competing plans to raise the nation's borrowing limit and fully reopen the federal government.
As Senate leaders tried to put the finishing touches on a bipartisan plan that runs through early 2014, House Republicans considered a new initiative, which avoids a debt crisis but adds provisions opposed by Democrats and the White House.
The way out of a budget standoff that threatens to trigger a debt crisis later this week was clouded Tuesday as the House and Senate worked on competing plans to raise the nation's borrowing limit and fully reopen the federal government. Damian Paletta reports.
But hours after unveiling the latest proposal, House GOP leaders were wavering about whether to bring the legislation to the floor for fear it might not have the support to pass, a lawmaker and a handful of aides familiar with the deliberations said.
"There have been no decisions about what exactly we will do," House Speaker John Boehner (R., Ohio) said after a meeting of House Republicans. "We're working with our members on a way forward, and to make sure that we provide fairness to the American people."
Mr. Boehner said House Republicans were working to find a way to avoid a debt crisis that risks a U.S. default on its obligations. "I have made clear for months and months that the idea of default is wrong, and we shouldn't get anywhere close to it," Mr. Boehner said.
A House Republican aide said leaders were making changes to the proposal after getting feedback from rank-and-file members. "Some members suggested specific changes on a handful of issues that would increase support, and leaders are discussing those suggestions now," the aide said.
Many conservatives rejected the agreement taking shape in the Senate that gives Republicans little of what they have been demanding in the two-week political standoff, leading to a confusing set of developments in Congress just as the Treasury is losing maneuvering room in its ability to pay the nation's bills.
It was unclear when or whether the House might take up the new GOP proposal, which accepts many terms of the Senate plan but would make more substantive changes to the 2010 health law championed by President Barack Obama. While the chamber's most combative lawmakers, many of them aligned with the tea party, say they want to continue fighting for their policy goals, others in the Republican Party say it is time to reopen the government and end an impasse that many fear has damaged the GOP's image.
Rep. Peter King (R. N.Y.) said that he believed the House GOP leaders' strategy was designed in part to speed up the process of passing legislation by Thursday. For procedural reasons, there will be fewer opportunities for delaying tactics in the Senate if the House acts on the legislation first and sends it to the Senate. Even if the Senate amended the bill and sent it back to the House, Mr. King said he was optimistic that the House would pass the bill with a bipartisan majority even if conservatives vote no.
Senate Majority Leader Harry Reid, speaking on the Senate floor, said the House GOP proposal can't pass the Senate and was an attempt by House Republicans to "torpedo" bipartisan Senate efforts to end the budget impasse. Mr. Reid also raised concerns the lingering standoff could soon prompt statements from U.S. ratings firms.
"Rating agencies are talking about downgrading us as early as tonight," Mr. Reid said, without elaborating on how he knew what they were considering doing.
Fitch and Moody's declined to comment on Mr. Reid's remarks. "We don't comment on market speculation," Fitch said. "The language on what we would potentially do is in our last report."
Moody's said: "We wouldn't comment on the timing of any ratings movement. It's his opinion."
The U.S. Treasury declined to comment.
Investors, meanwhile, showed tepid demand Tuesday in two closely watched short-term debt U.S. debt sales. The Treasury Department held simultaneous auctions of $35 billion of three-month bills and $30 billion of six-month bills Tuesday. The so-called bid-to-cover ratio, a gauge of investor demand, fell in both auctions, continuing a trend seen in recent short-term bill auctions, as many investors have chosen to avoid debt they believe could be hit in a potential default.
Although both the Senate and House plans would fund the government through Jan. 15, 2014, and raise the debt ceiling through Feb. 7, the House plan contains several Obamacare changes and would restrict the Treasury's ability to work around debt-ceiling deadlines by using extraordinary measures through debt management and shifts in bill payments.
House GOP lawmakers on Tuesday hunkered down behind closed doors in an extended party meeting to discuss the proposal. An hour into the meeting lawmakers kicked out all aides. Dozens of normally chatty lawmakers ducked all questions as they emerged.
Even before it was publicly aired, the White House rejected the latest House plan.
"Democrats and Republicans in the Senate have been working in a bipartisan, good-faith effort to end the manufactured crises that have already harmed American families and business owners," White House spokeswoman Amy Brundage said in a statement. "With only a couple days remaining until the United States exhausts its borrowing authority, it's time for the House to do the same."
A senior Senate Democratic aide said it was unclear how the development would affect the timing of the deal under discussion between the Senate's leaders, which stayed in the background on Tuesday. Senate GOP leaders are hanging back on the proposal as they wait for plans to solidify in the House, a Senate Republican aide said.
The Senate's two top leaders have been negotiating since the weekend on a narrower plan to end the budget standoff. Mr. Reid and the Senate's Republican leader, Mitch McConnell of Kentucky, have said they were close to reaching an agreement, but Democratic and Republican Senate aides said that negotiations to finalize details of the deal were put on hold Tuesday while they awaited the outcome of possible action in the House.
Time is running extremely short and it has become increasingly difficult for Congress to act before Thursday, when the Treasury says a government cash crunch will take hold. One big obstacle to quick action are Senate rules that make it easy for even a single senator to delay action on legislation. Under those rules, the Senate will probably need every member to agree to expedited procedures in order for debate on legislation to wrap up before the weekend at the earliest.
House Republicans said one important change they made to the expected Senate deal was to remove the Treasury Department's emergency flexibility in managing the debt ceiling, often known as "extraordinary measures." GOP lawmakers are worried that the proposed extension of the federal borrowing limit to Feb. 7 could actually stretch beyond that date, if Treasury officials take steps to ensure the government keeps paying its bills.
"We want to make Feb. 7 the date certain—when that dates comes, that's it. They don't have the ability to play around with things," said Rep. John Fleming (R., La.).
Democrats have strongly resisted any efforts to limit the Treasury's abilities. President Obama called Senate Minority Leader McConnell on Monday to express his concerns, which Senate Democrats reiterated Tuesday morning.
Treasury's flexibility with the debt ceiling has been "in place for decade after decade after decade to prevent a catastrophic default on the nation's bills," Mr. Reid said on the Senate floor. "Out of spite, the tea party Republicans are trying to take authority away from President Obama."
—Damian Paletta contributed to this article.
Write to Patrick O'Connor at [email protected] and Kristina Peterson at [email protected]
WASHINGTON—The way out of a budget standoff that threatens to trigger a debt crisis later this week was clouded Tuesday as the House and Senate worked on competing plans to raise the nation's borrowing limit and fully reopen the federal government.
As Senate leaders tried to put the finishing touches on a bipartisan plan that runs through early 2014, House Republicans considered a new initiative, which avoids a debt crisis but adds provisions opposed by Democrats and the White House.
The way out of a budget standoff that threatens to trigger a debt crisis later this week was clouded Tuesday as the House and Senate worked on competing plans to raise the nation's borrowing limit and fully reopen the federal government. Damian Paletta reports.
But hours after unveiling the latest proposal, House GOP leaders were wavering about whether to bring the legislation to the floor for fear it might not have the support to pass, a lawmaker and a handful of aides familiar with the deliberations said.
"There have been no decisions about what exactly we will do," House Speaker John Boehner (R., Ohio) said after a meeting of House Republicans. "We're working with our members on a way forward, and to make sure that we provide fairness to the American people."
Mr. Boehner said House Republicans were working to find a way to avoid a debt crisis that risks a U.S. default on its obligations. "I have made clear for months and months that the idea of default is wrong, and we shouldn't get anywhere close to it," Mr. Boehner said.
A House Republican aide said leaders were making changes to the proposal after getting feedback from rank-and-file members. "Some members suggested specific changes on a handful of issues that would increase support, and leaders are discussing those suggestions now," the aide said.
Many conservatives rejected the agreement taking shape in the Senate that gives Republicans little of what they have been demanding in the two-week political standoff, leading to a confusing set of developments in Congress just as the Treasury is losing maneuvering room in its ability to pay the nation's bills.
It was unclear when or whether the House might take up the new GOP proposal, which accepts many terms of the Senate plan but would make more substantive changes to the 2010 health law championed by President Barack Obama. While the chamber's most combative lawmakers, many of them aligned with the tea party, say they want to continue fighting for their policy goals, others in the Republican Party say it is time to reopen the government and end an impasse that many fear has damaged the GOP's image.
Rep. Peter King (R. N.Y.) said that he believed the House GOP leaders' strategy was designed in part to speed up the process of passing legislation by Thursday. For procedural reasons, there will be fewer opportunities for delaying tactics in the Senate if the House acts on the legislation first and sends it to the Senate. Even if the Senate amended the bill and sent it back to the House, Mr. King said he was optimistic that the House would pass the bill with a bipartisan majority even if conservatives vote no.
Senate Majority Leader Harry Reid, speaking on the Senate floor, said the House GOP proposal can't pass the Senate and was an attempt by House Republicans to "torpedo" bipartisan Senate efforts to end the budget impasse. Mr. Reid also raised concerns the lingering standoff could soon prompt statements from U.S. ratings firms.
"Rating agencies are talking about downgrading us as early as tonight," Mr. Reid said, without elaborating on how he knew what they were considering doing.
Fitch and Moody's declined to comment on Mr. Reid's remarks. "We don't comment on market speculation," Fitch said. "The language on what we would potentially do is in our last report."
Moody's said: "We wouldn't comment on the timing of any ratings movement. It's his opinion."
The U.S. Treasury declined to comment.
Investors, meanwhile, showed tepid demand Tuesday in two closely watched short-term debt U.S. debt sales. The Treasury Department held simultaneous auctions of $35 billion of three-month bills and $30 billion of six-month bills Tuesday. The so-called bid-to-cover ratio, a gauge of investor demand, fell in both auctions, continuing a trend seen in recent short-term bill auctions, as many investors have chosen to avoid debt they believe could be hit in a potential default.
Although both the Senate and House plans would fund the government through Jan. 15, 2014, and raise the debt ceiling through Feb. 7, the House plan contains several Obamacare changes and would restrict the Treasury's ability to work around debt-ceiling deadlines by using extraordinary measures through debt management and shifts in bill payments.
House GOP lawmakers on Tuesday hunkered down behind closed doors in an extended party meeting to discuss the proposal. An hour into the meeting lawmakers kicked out all aides. Dozens of normally chatty lawmakers ducked all questions as they emerged.
Even before it was publicly aired, the White House rejected the latest House plan.
"Democrats and Republicans in the Senate have been working in a bipartisan, good-faith effort to end the manufactured crises that have already harmed American families and business owners," White House spokeswoman Amy Brundage said in a statement. "With only a couple days remaining until the United States exhausts its borrowing authority, it's time for the House to do the same."
A senior Senate Democratic aide said it was unclear how the development would affect the timing of the deal under discussion between the Senate's leaders, which stayed in the background on Tuesday. Senate GOP leaders are hanging back on the proposal as they wait for plans to solidify in the House, a Senate Republican aide said.
The Senate's two top leaders have been negotiating since the weekend on a narrower plan to end the budget standoff. Mr. Reid and the Senate's Republican leader, Mitch McConnell of Kentucky, have said they were close to reaching an agreement, but Democratic and Republican Senate aides said that negotiations to finalize details of the deal were put on hold Tuesday while they awaited the outcome of possible action in the House.
Time is running extremely short and it has become increasingly difficult for Congress to act before Thursday, when the Treasury says a government cash crunch will take hold. One big obstacle to quick action are Senate rules that make it easy for even a single senator to delay action on legislation. Under those rules, the Senate will probably need every member to agree to expedited procedures in order for debate on legislation to wrap up before the weekend at the earliest.
House Republicans said one important change they made to the expected Senate deal was to remove the Treasury Department's emergency flexibility in managing the debt ceiling, often known as "extraordinary measures." GOP lawmakers are worried that the proposed extension of the federal borrowing limit to Feb. 7 could actually stretch beyond that date, if Treasury officials take steps to ensure the government keeps paying its bills.
"We want to make Feb. 7 the date certain—when that dates comes, that's it. They don't have the ability to play around with things," said Rep. John Fleming (R., La.).
Democrats have strongly resisted any efforts to limit the Treasury's abilities. President Obama called Senate Minority Leader McConnell on Monday to express his concerns, which Senate Democrats reiterated Tuesday morning.
Treasury's flexibility with the debt ceiling has been "in place for decade after decade after decade to prevent a catastrophic default on the nation's bills," Mr. Reid said on the Senate floor. "Out of spite, the tea party Republicans are trying to take authority away from President Obama."
—Damian Paletta contributed to this article.
Write to Patrick O'Connor at [email protected] and Kristina Peterson at [email protected]