Sept. 28 (Bloomberg) -- The U.S. government lurched toward a partial shutdown Oct. 1 as House Republicans planned to attach a delay of Obamacare to a bill to keep the government open and Senate Democrats said they will reject the proposal.
The House is poised to vote tonight in Washington to delay portions of Obamacare for a year and repeal a medical device tax as part of a plan to extend government funding through Dec. 15. That’s a position party leaders resisted two weeks ago, until a few dozen Tea Party-backed lawmakers pulled them to the hard-line stance.
“Republicans have tried and failed to defund or delay the health care law more than 40 times, and they know this demand is reckless and irresponsible,” Jay Carney, the White House press secretary, said in a statement today. “Any member of the Republican Party who votes for this bill is voting for a shutdown.”
The developments dramatically raise the likelihood of a shutdown. The fiscal year ends Sept. 30, and the policy divide is wide, because congressional Democrats and President Barack Obama say they won’t accept any of the conditions Republicans are uniting around.
“The American people don’t want a government shutdown and they don’t want Obamacare,” House Speaker John Boehner and other Republican leaders said in a statement today. “We will do our job and send this bill over, and then it’s up to the Senate to pass it and stop a government shutdown.”
House Republicans plan to pass a separate bill to ensure that U.S. troops, along with some civilians and contractors who work for the military, are paid if the government shuts down. The House began debating the spending issue just before 8 p.m. Washington time, with a final vote set for later tonight.
Budget brinkmanship has become routine in Washington, particularly since Republicans gained control of the House in the 2010 election. A last-minute deal before Oct. 1 is still achievable, and one possible move is for both chambers to pass a short-term funding measure -- for a few days to a week -- to keep the government open and leave more time for debate.
The House Republican leadership doesn’t expect to pass a clean spending bill or have enough Republicans who would want to do that, according to a leadership aide who spoke on condition of anonymity to discuss party strategy.
The House probably will amend the spending bill one more time. A likely option would eliminate the government’s contribution to the health insurance of members of Congress and staff, as a way of testing Democrats’ willingness to make any change to the health law, the aide said.
Right now, there is no desire or plan for a one-week extension of funding, the aide said.
Many Senate Democrats oppose the medical device tax, and a repeal garnered a 79-20 vote earlier this year. That doesn’t mean they want to attach it to the spending bill. The leading Senate advocate, Democrat Amy Klobuchar of Minnesota, rejected the idea this week.
“We continue to be willing to debate these issues in a calm and rational atmosphere,” Senate Majority Leader Harry Reid said in a statement today that called the Republican plan “pointless.” He added, “The American people will not be extorted by Tea Party anarchists.”
The Senate yesterday passed a bill that would fund the government through Nov. 15, omitting Republican language to choke off funds for the 2010 health-care law.
Reid yesterday warned that House revisions to the spending bill would lead to a shutdown. A Senate Democratic aide who spoke on condition of anonymity said it was unlikely the Senate would return before Sept. 30 to consider the House plan.
The Senate could reject the House’s amendments and send the bill without the Obamacare-delay provisions back to the House with hours remaining before a shutdown.
“Let’s keep this government running,” Democratic Senator Mark Begich of Alaska, who is up for re-election in 2014, said yesterday. “Look at the markets the last few days. The shenanigans they’re playing are causing the markets to falter and that’s bad for the economy and bad for jobs.”
Concerns that the budget impasse will hurt economic growth helped push the Standard & Poor’s 500 Index to its first weekly decline since August. The index fell 0.4 percent to 1,691.75 yesterday, and dropped 1.1 percent for the week. The rate on 10-year Treasury notes fell three basis points to 2.62 percent yesterday.
A shutdown could reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on its duration, according to economists. The biggest effect would come from the output lost from furloughed workers.
Even if Congress resolves the spending fight, lawmakers would immediately move to the next fiscal dispute over raising the $16.7 trillion debt ceiling. Unless Congress acts, the U.S. won’t have enough money to pay all of its bills at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
House Republicans have voted more than 40 times to delay, defund or repeal all or part of the 2010 health-care law, which is designed to expand coverage to at least 30 million people. Some of the narrower proposals became law. The U.S. Supreme Court upheld the law in June 2012.
Today’s move marks a sharp turn for Boehner and Republican leaders, who earlier this month tried to pass a plan that would have let the Senate strip out anti-Obamacare language and send the spending bill directly to Obama.
Tea Party-backed lawmakers rejected that approach, forcing Republican leaders to tie government funding to provisions aimed at stifling the health law.
Representative Nancy Pelosi of California, the House Democratic leader, opposed the Republican plan in absentia; she’s celebrating her 50th wedding anniversary.
The proposal under consideration today would delay the individual mandate along with many taxes and fees from the health law. It’s based on a proposal from Representative Marsha Blackburn, a Tennessee Republican.
“It’s exactly what we asked for and we got it,” said Republican Representative Michele Bachmann of Minnesota.
Republicans, torn by internal strategic and policy disputes, are choosing to make their stand against the health law. The first insurance exchanges open Oct. 1 and other portions of the law already have taken effect.
“Harry Reid has been a jerk, and I think he’s done nothing but unify the Republican House, saying ‘Look, we’re going to do what’s right,’” said Representative David Schweikert, an Arizona Republican.
At the White House, Obama accused House Republicans of “political grandstanding” that has hurt economic growth. He urged Congress to work together to pass a spending plan and then adopt legislation to increase the nation’s borrowing authority.
“Do not shut down the government. Do not shut down the economy,” Obama said yesterday. “Pass a budget on time. Pay our bills on time. Refocus on the everyday concerns of the American people.”
Republicans have been infuriated by Obama’s unwillingness to negotiate, pointing to his conversation yesterday with Iranian President Hassan Rouhani.
“It’s really interesting that the Democrats are willing to negotiate with Iran,” said Representative Richard Hudson, a North Carolina Republican. “But they won’t negotiate with us.”
In a government shutdown, essential operations and programs financed with permanent streams of money would continue, meaning that Social Security checks would be delivered and military personnel would still work. National parks, Internal Revenue Service call centers and passport offices are among the federal facilities that could close.
The bill is H.J. Res. 59. The troop funding bill is H.R. 3210.
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