Reid Says Budget Nod Necessary to Avoid Party ’Suicide’

Photographer: Andrew Harrer/Bloomberg

Senate Majority Leader Harry Reid, a Democrat from Nevada, speaks following a Bloomberg Television interview at the U.S. Capitol in Washington, D.C. on Dec. 13, 2013. Close

Senate Majority Leader Harry Reid, a Democrat from Nevada, speaks following a Bloomberg... Read More

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Photographer: Andrew Harrer/Bloomberg

Senate Majority Leader Harry Reid, a Democrat from Nevada, speaks following a Bloomberg Television interview at the U.S. Capitol in Washington, D.C. on Dec. 13, 2013.

Senate Majority Leader Harry Reid predicts the Senate next week will confirm Janet Yellen as chairman of the Federal Reserve and will clear a budget agreement unless Republicans intend to commit “political suicide.”

“Here is one of the agreements that is a landmark agreement, not because of the massive size of it, but because what it does to the Congress or for the Congress and for the American people,” the Nevada Democrat said of the House-passed budget plan in an interview for Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “It would be suicide if the Republicans didn’t pass it.”

Reid said he is working with Senate Foreign Relations Chairman Robert Menendez to craft an Iran sanctions measure the chamber could consider in January and he has no intention of reversing a Nov. 21 rules change denying Republicans the option of blocking President Barack Obama’s nominees.

The budget passed by the House yesterday covers $1.01 trillion in spending through March 2015 and would require that the debt limit be raised. It was crafted by a bipartisan committee led by Senator Patty Murray, a Washington Democrat, and Representative Paul Ryan, a Wisconsin Republican.

Reid said the Senate would consider the budget next week, and he predicted strong Democratic support, saying, “We’ll get our votes.” He also said the Senate would vote on Yellen’s nomination to lead the Federal Reserve.

Obama’s Choice

Reid said he read this week about Obama’s top candidate to replace Yellen as vice chairman of the Fed, said by people familiar with the selection process to be former Bank of Israel Governor Stanley Fischer. The president and Yellen jointly decided to choose Fischer, 70, and Obama has offered him the job, one person said this week.

“It sounds interesting, somebody who’s been in a board of governors of some other bank going to be now our bank,” Reid said. “But, you know, I don’t know.”

The majority leader made clear that he would preserve the option of acting on Iran sanctions legislation in January, though the Obama administration has urged Congress to stand down in light of a deal struck last month by Secretary of State John Kerry. In the agreement, Iran said it would freeze its nuclear program in exchange for easing of sanctions.

“It’s an important issue,” Reid said. “Iran has been a real problem for the United States for almost 40 years now, and we cannot let them get a nuclear weapon.”

‘Never Bad’

He added, “I’m going to do everything I can to protect the administration and their negotiations, but I’m also going to take into consideration the fact that bipartisan legislation is never bad.”

Reid said he felt “pretty good” abut Democrats’ prospects of retaining the chamber’s majority in the 2014 midterm elections.

“We’d have to lose six seats, and I don’t see that,” Reid said of Democrats, who control 55 seats in the 100-member chamber. “Not only do we have my incumbents that are doing extremely well, we have states like Kentucky, where we’re ahead there. We have states like Georgia, where Michelle Nunn is running extremely well.”

Reid said he won’t campaign or raise money for Alison Grimes, the Democrat who is running to unseat Senate Republican Leader Mitch McConnell in Kentucky.

“I’m a traditionalist here, and that isn’t anything I’ve ever done and will not do,” he said.

The normally soft-spoken and taciturn Reid said he was excited by what he termed as Obama’s “wise choice” to bring former Clinton White House Chief of Staff John Podesta on as an adviser.

‘Good Guy’

“When I was told this was going to happen by the president’s chief of staff, he could probably hear me yell over the phone,” he said. “In fact, I know he did. John Podesta is going to bring some political savvy to the White House, and I think that’s so important. He’s such a good guy.”

In a separate “Political Capital” interview, Maryland Representative Chris Van Hollen praised Republican Speaker John Boehner for standing up to his party’s anti-spending wing on the budget. The House passed the budget deal 332-94 yesterday, with 169 Republicans voting in favor.

Van Hollen, the top Democrat on the Budget Committee, said the next test of congressional bipartisanship will be whether Republicans use the debt ceiling next year as a political weapon.

“The jury’s still out on where we go from here,” he said.

Political Agenda

“The big test of that will be when we get to the debt ceiling, whether or not House Republicans again threaten not to pay the bills that are due and owing, and try and use that moment to extract, you know, concessions on their political agenda,” Van Hollen said.

The U.S. borrowing limit, which was $16.7 trillion, was suspended until Feb. 7, 2014, as part of the October deal to end a partial shutdown of the federal government. After that, the Treasury Department will be able to use so-called extraordinary measures to stave off default, such as suspending investments of a retirement fund.

“It was a good sign that Speaker Boehner finally stood up to the Tea Party crowd,” Van Hollen said. “The Tea Party crowd has essentially been running the show in the House of Representatives for the year.”

Obama has said he isn’t willing to negotiate further spending cuts in return for Republicans supporting an increase in borrowing authority. Van Hollen said the government has incurred bills that must be paid.

Unemployment Benefits

The budget deal didn’t include the extension of long-term unemployment insurance sought by Democrats. House Republicans rejected Van Hollen’s bid to pay for the aid from cuts in farm subsidies being negotiated in agriculture-policy legislation.

Van Hollen said Democrats should tie support for legislation authorizing farm programs for five years, which may include cuts of $4 billion to $39 billion in food stamps over 10 years, with an extension of the unemployment benefits.

“I have lots of concerns about the ag bill, the way it’s shaping up,” he said. “But, my goodness, we know it’s got at least $15 billion in savings. Let’s use that to help these people who are out in the cold.”

Congressional Democrats enter the 2014 election year with headwinds from the flawed Oct. 1 debut of the website offering people insurance under the president’s health-care law.

Van Hollen, describing healthcare.gov’s rollout as “very rocky,” said political damage for Democrats won’t be permanent. States including California, New York and Kentucky that run exchanges are doing well, he said. Maryland had stumbles similar to the federal site and is “struggling,” he said.

Adviser Returns

In addition to Podesta, Obama is bringing back former legislative affairs director Phil Schiliro to oversee policy implementation of the Patient Protection and Affordable Care Act.

Both men will make a difference in how the Obama administration operates, Van Hollen said. Schiliro met with House Democrats yesterday to discuss the health-care law and how the White House could anticipate and correct flaws in advance. Van Hollen said Podesta is an “old pro.”

“You’re going to see continued improvement going forward,” Van Hollen said of the law’s implementation. “And as more and more people sign up and you get more and more people having access to affordable care who didn’t before, you’re going to have a very different story here.”

To contact the reporters on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net; Derek Wallbank in Washington at dwallbank@bloomberg.net

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

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