House Republicans Lack Plan as Senate Nears Budget Vote

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Committee chairman Rep. Paul Ryan (R-WI), left, with ranking member Rep. Chris Van Hollen (D-MD) during a hearing before the House Budget Committee September 26, 2013 on Capitol Hill in Washington, DC. Close

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Committee chairman Rep. Paul Ryan (R-WI), left, with ranking member Rep. Chris Van Hollen (D-MD) during a hearing before the House Budget Committee September 26, 2013 on Capitol Hill in Washington, DC.

House Republicans lack a clear plan for their next move in the budget impasse that could lead to a government shutdown Oct. 1, as the Senate is set to pass a short-term spending bill and challenge the House to act.

House leaders haven’t determined how to respond to the Senate bill funding the government through Nov. 15, said a Republican leadership aide who spoke on condition of anonymity. The Senate began a series of votes today, heading toward a final vote that would remove Republican-backed provisions to defund the 2010 health-care law and pass the spending bill.

Representative Steve Southerland, a Florida Republican, said House Republicans are coalescing around sending back to the Senate a measure with a one-year delay in the mandate for uninsured individuals to purchase health coverage.

“There’s a whole host of things in Obamacare the Senate would be hard pressed to reject if we were to send it to them,” said Representative Tom Cotton, an Arkansas Republican.

Senate Democrats have said they would reject those ideas and that such a strategy would invite a shutdown. They also are trying to present a united front as a prelude to the legislative fight next month over raising the debt ceiling.

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People walk through a hallway at the Senate side of the U.S. Capitol in Washington, D.C. on Sept. 27, 2013. Close

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People walk through a hallway at the Senate side of the U.S. Capitol in Washington, D.C. on Sept. 27, 2013.

The Senate’s first of four votes was a 79-19 roll call in favor of cutting off debate on the measure. That was a defeat for Texas Republican Ted Cruz, who had tried to rally his party to hold up the bill over the Obamacare defunding language.

Oil Pipeline

Other possible additions the House is considering include construction of TransCanada Corp. (TRP)’s Keystone XL pipeline and repealing a tax on medical devices, according to a congressional aide who asked not to be identified because decisions aren’t final. House Republicans will meet tomorrow at noon.

They are also considering a smaller concession that would be a worst-case political scenario for Republicans -- eliminating health insurance subsidies for members of Congress, the aide said. Some newcomer Republicans want to combine the change for members and the one-year delay, said a lawmaker who requested anonymity to speak before the Senate vote.

To avoid a shutdown, House Republicans are discussing a short-term resolution that would keep the government funded for a day or a week, said Representative John Fleming, a Louisiana Republican.

House Speaker John Boehner’s efforts to shift his members’ focus to the next fight -- over raising the debt limit -- were set back yesterday. Some House Republicans objected to Boehner’s tactic of holding a quick vote on his debt-limit plan, instead preferring to fight longer on the spending bill.

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House Speaker John Boehner’s repeated revisions of his strategy show his difficulties in getting House Republicans to unite behind any particular approach. Close

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House Speaker John Boehner’s repeated revisions of his strategy show his difficulties in getting House Republicans to unite behind any particular approach.

Boehner’s Difficulties

Boehner’s repeated revisions of his strategy show his difficulties in getting House Republicans to unite behind any particular approach. That internal party dynamic -- along with Democrats’ unwillingness to accept major changes to Obamacare -- makes the path to avoiding a shutdown difficult.

“There is not an eagerness among the conservatives in the House to jump into a trillion-dollar debt-ceiling increase discussion right now, especially when you have a real legislative fight over Obamacare already ongoing,” said Dan Holler, communications director for Heritage Action for America, a small-government group. “It makes a ton of sense to see how that plays out.”

Concerns that the budget impasse will hurt economic growth helped send the Standard & Poor’s 500 index to its first weekly decline since August. That stock index fell 0.5 percent to 1,690.71 at 10:32 a.m. in New York while the rate on 10-year Treasury notes lost 2.9 basis points to 2.62 percent.

Senate Votes

Today’s Senate votes will begin a weekend of negotiating and brinkmanship that could continue until spending authority expires at the end of Sept. 30.

Boehner said yesterday the House wouldn’t pass a “clean” spending bill after the Senate acts and then said he has “no interest in seeing a government shutdown.”

“There will be options available to us, there’s not going to be any speculation about what we’re going to do or not do, until the Senate passes their bill,” he said.

The calendar gives lawmakers few options, particularly in the Senate, where a single member can force as many as four days of debate on a bill. One option for Senate Democrats would be to leave Washington once their version of the bill is passed and refuse any changes.

New Bill

Such a move would put pressure on the House to accept the Senate’s version or risk a shutdown starting Oct. 1.

“Instead of legislating responsibly, they want to live dangerously, and that’s not good for the American people,” said Nancy Pelosi of California, the House Democratic leader. “Their Tea Party ransom demands come at a significant cost to our economic security.”

If the House next sets aside the Senate’s version and uses a new bill, that would signal the chamber’s leaders were reserving the option of later passing the Senate measure unchanged to avert a shutdown at the last minute.

Boehner has been trying to focus on what he has called a “whale of a fight” over raising the $16.7 trillion debt limit, which will be necessary in October to allow the government to pay all its bills, according to the Congressional Budget Office.

A prolonged shutdown could reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on its length, economists say, as government workers including park rangers and telephone receptionists are furloughed.

Debt Plan

Boehner yesterday outlined for members a plan that would pair spending cuts, eased regulations and a delay in the 2010 health-care law with an increase in U.S. borrowing authority. Republican Representatives Paul Broun of Georgia, Louie Gohmert of Texas, Tim Huelskamp of Kansas and Mo Brooks of Alabama said they were opposed.

The Republican debt-limit bill would seek to increase means-testing for Medicare, reduce the Medicaid provider tax, revise medical malpractice law and eliminate a public-health fund as part of the 2010 law. Republicans also want to eliminate a tax on medical devices and require a Social Security number in order to receive a child tax credit, according to the proposal.

Representative Devin Nunes, a California Republican, said the party can best achieve its long-term goal of reducing federal debt by focusing on the borrowing authority, not the short-term spending fight.

‘A Fiasco’

“It’s just a fiasco created by a very few members,” he said. “I don’t see this as a long-term strategy.”

Nunes said the House should pass the loaded-up debt ceiling bill quickly, to get it to the Senate, where provisions limiting Environmental Protection Agency regulations and approving the Keystone XL pipeline could put pressure on Democratic senators who support those items.

“We’ve got to get it out of here and over there,” he said.

Representative Mark Meadows, a North Carolina Republican, said he preferred a fight over Obamacare during the spending debate, saying it carried less economic risk using the debt ceiling as leverage.

“I see the debt ceiling as having greater economic consequences,” Meadows said. “If you look at the economic impact of a government shutdown versus potentially not raising the debt ceiling, they are very, very different dynamics.”

President Barack Obama said he won’t negotiate over the debt ceiling.

Senator Richard Durbin of Illinois, the chamber’s second-ranking Democrat, said it’s irresponsible to seek concessions on the spending bill.

‘We’re Finished’

Political bargaining on the stopgap measure or the debt limit increase means that “we’re finished,” Durbin said on Bloomberg Television’s “Capitol Gains” airing this weekend. “We’ll do this every time, maybe five or six times a year. What’s that going to do to us as a nation, to our government, to our reputation or to our economy?”

The spending bill is H.J. Res 59.

To contact the reporters on this story: Richard Rubin in Washington at rrubin12@bloomberg.net; Roxana Tiron in Washington at rtiron@bloomberg.net; Michael C. Bender in Washington at mbender10@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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