A bipartisan Senate agreement to end the U.S. fiscal impasse is almost completed, Senator Richard Durbin said today.
Durbin of Illinois, the second-ranking Senate Democrat, said at the Capitol today that we are “moving into the next phase.”
The deal, which would end the 16-day-old government shutdown and prevent a U.S. default, will probably be accepted in the House by Speaker John Boehner, said Representative Kevin Brady of Texas, a senior Republican in the chamber.
A final Senate deal and House agreement to accept it could clear the way to bring the fiscal impasse to an end with votes as soon as today.
The framework being negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell presents the clearest path to ending the government shutdown and extending U.S. borrowing authority, which lapses tomorrow. It would fund the government through Jan. 15, 2014, and suspend the debt limit until Feb. 7.
Brady said on Bloomberg Television that he thinks House Republicans’ inability to come up with a plan to raise the debt limit before U.S. borrowing authority lapses tomorrow meant that the House would have to accept whatever Senate leaders come up with.
“This party is not uniting behind our core issues,” Brady said. “As a result, I think we are all frustrated with our ability to impact this overall agreement.”
House leaders haven’t decided whether to vote before the Senate does, said a Republican aide who spoke on condition of anonymity. For procedural reasons, if the House votes first, the bill could reach President Barack Obama’s desk more quickly and end the 16-day-old government shutdown.
The emerging Senate accord may be announced as early as this morning, after one ratings company yesterday placed the U.S.’s AAA credit rating on a negative watch.
“We’re very hopeful it can happen very soon,” said Senator Charles Schumer, a New York Democrat. Don Stewart, McConnell’s spokesman, today said the leaders are “still working” on a deal.
In the Senate, Texas Republican Ted Cruz, who has led a campaign against Obama’s signature health-care law, has left open the possibility of delaying the debt-ceiling measure. If any of the 100 senators chooses to delay it, a vote could be pushed to as late as next week, raising the prospect of a missed payment on the debt.
Reid, a Nevada Democrat, and McConnell, a Kentucky Republican, temporarily suspended talks yesterday while Boehner tried and failed to marshal House Republicans behind a plan that was significantly scaled-down from demands for health-law changes that led to the U.S. government shutdown on Oct. 1.
The partial shutdown has closed national parks, slowed clinical drug trials and led to the furlough of thousands of federal workers.
Fitch Ratings yesterday put the U.S. AAA credit grade on ratings watch negative, citing the government’s inability to raise the debt ceiling in a timely manner, according to a statement after markets in New York closed.
The Standard & Poor’s 500 Index rose 1.3 percent to 1,720.74 at 11:05 a.m. in New York after sliding 0.7 percent yesterday.
Rates on Treasury bills maturing in the next six weeks fell amid optimism lawmakers are working to resolve the fiscal impasse. Rates on $120 billion of bills maturing tomorrow rose as high as 0.36 percent yesterday before dropping to 0.13 percent.
One-month rates fell seven basis points, or 0.07 percentage point, to 0.27 percent at 10:14 a.m. in New York after touching 0.45 percent, the highest since October 2008, according to data compiled by Bloomberg. The benchmark 10-year yield rose two basis points to 2.75 percent, according to Bloomberg Bond Trader data.
Under the emerging Senate agreement, House Republicans would get almost none of their priorities. They tried to defund or delay the health-care law, settling last month on trying to delay the requirement that individuals purchase health insurance.
Obama has described those requests as unacceptable ransom demands and insisted that Republicans relent.
Republicans persisted after the partial government shutdown started Oct. 1 and saw their approval ratings drop in polls. Hardliners resisted plans that didn’t make major changes to the Patient Protection and Affordable Care Act. Others, such as Representative Peter King of New York, stuck with Boehner while complaining about the strategy.
“And the long teachable moment ends: stove is hot,” Representative Tim Griffin, an Arkansas Republican, said on Twitter last night after Boehner scrapped the latest plan.
The emerging Senate agreement trades the pressing and already-missed deadlines for new ones over the next four months. The Treasury Department would be allowed to use so-called extraordinary measures to delay default for about another month beyond Feb. 7, said a Senate Democratic aide who spoke on condition of anonymity to discuss the plan.
The Senate accord could include a Republican-backed provision to tighten income verification requirements for people receiving health-insurance subsidies. That provision is linked to a proposal backed by Democrats and labor unions that would delay a reinsurance fee on group health plans.
Both of those health-care provisions will either be in the agreement or be out of the agreement.
Senate passage of a bill could be delayed into late next week if a single senator objects, the aide said. Then that bill would have to go to the House. Procedurally, the Senate would have been able to act by Oct. 18 if the House had passed a bill last night.
Cruz, who led a Republican bid to defund Obamacare, spoke for more than 21 hours in a budget debate last month. On Oct. 14, he wouldn’t rule out stalling maneuvers, saying he wants to see the plan’s details. He made no public comments yesterday.
Unless Congress acts, the U.S. will be operating only on about $30 billion of cash reserves and incoming revenue starting tomorrow. It will begin missing promised payments between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Boehner has tried several times over the past month to construct a debt-limit bill that House Republicans could support, and he hasn’t brought any proposals to a vote. Republicans didn’t have enough votes for the measure yesterday, said a leadership aide who spoke on condition of anonymity to discuss vote counting.
Unlike previous stopgap spending measures, the House bill wouldn’t have made big changes to the 2010 health-care law, and it contains no cuts to entitlement programs that Republicans sought to add to a debt-limit increase or spending bill.
Democratic Leader Nancy Pelosi of California said the proposal is a path to default and urged Boehner to support a bipartisan agreement emerging in the Senate.