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House Postpones Vote on Bill to Reopen Government
Updated: Tuesday, October 15 2013, 07:22 PM EDT
WASHINGTON (AP) - Time growing desperately short, House Republican efforts to pass legislation averting a Treasury default and ending a partial government shutdown collapsed Tuesday night, and one of the country's top ratings firms warned of a possible downgrade in the nation's creditworthiness.
The decision by Speaker John Boehner and the GOP leadership to pull a bill they had unveiled earlier in the day appeared to mark the end of what amounted to a daylong detour from separate negotiations in the Senate that had appeared on the verge of bearing fruit.
There was no immediate reaction from Senate Majority Leader Harry Reid or the Republican leader, Sen. Mitch McConnell, on next steps as divided government sought to extricate itself from yet another crisis.
As the day of secret meetings and frenzied maneuvering unfolded in all corners of the Capitol, Sen. Barbara Mikulski, D-Md., stood on the Senate floor at midafternoon and declared, "We are 33 hours away from becoming a deadbeat nation, not paying its bills to its own people and other creditors."
In New York, the Fitch rating agency warned that it was reviewing the government's AAA credit rating for a possible downgrade, though no action was near. Fitch, one of the three leading U.S. credit-ratings agencies, said that "the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default."
On Wall Street, the Dow Jones industrial average fell 133 points after rising a day earlier when optimism spread that a deal might be at hand.
Under the revised bill prepared by House Republicans, the Treasury would be permitted to borrow normally until Feb. 7 and the government reopened with sufficient funds to carry it to Dec. 15.
Additionally, members of Congress, the president, vice president and thousands of aides would no longer be eligible to receive employer health care contributions from the government that employs them.
Before the bill seemed to lose steam later in the day, Michael Steel, a spokesman for Speaker John Boehner said in a statement, "The House will vote tonight to reopen the government and avoid default."
He said the legislation would "end Obamacare subsidies for elected officials and staff in Washington, D.C., and pressure Senate Democrats to accept more sensible" time frames for reopening the government and renewing Treasury's borrowing authority.
Gone from the measure was a pair of provisions that had drawn objections, one a plan to delay a medical device tax created under the new health care law known as Obamacare. The other would have imposed tougher income verification standards on individuals and families seeking subsidies for care under the law.
Democrats had viewed both as concessions to Republicans, and deemed their inclusion as a violation of Obama's vow not to pay a "ransom" to the GOP for passing essential funding and borrowing measures.
Even with the changes, it was unclear whether Boehner and the GOP leadership had the votes to pass their measure.
Heritage Action, a group with close tea party ties, announced it would oppose the measure because "it will do absolutely nothing to help Americans who are negatively impacted by Obamacare." It said it would include the vote in its determinations next year on which candidates to support in the midterm elections.
The day's events prompted an outbreak of partisan rhetoric, mixed with urgent warnings that both the U.S. and global economies could suffer severe damage quickly unless Congress acted by Thursday.
Even something of an appeal for heavenly aid was thrown in, as Rep. Steve Southerland of Florida led House Republicans in a rendition of "Amazing Grace" at the beginning of a rank-and-file meeting called to discuss a way out of the impasse.
Speaking with reporters, Boehner said, "I have made clear for months and months that the idea of default is wrong and we shouldn't get anywhere close to it."
But the first measure the leadership produced evidently came up short on votes, and the White House trashed it as an attempt to "appease a small group of tea party Republicans who forced the government shutdown in the first place. "
Democrats jumped on Boehner and the plan he produced.
In unusually personal remarks, Senate Majority Leader Harry Reid said the Ohio Republican had "once again tried to preserve his role at the expense of the country."
That was a reference to a rebellious rank and file in the House, who routinely seek to push Boehner and the rest of the leadership to the right. A group met Monday night with Texas Sen. Ted Cruz, who last summer played a public role in a campaign to demand defunding of Obamacare as the price for preventing a partial government shutdown.
The Democratic attacks were too much for some Republicans who have been among those most vocal in calling for a bipartisan solution to the impasse.
"It's piling on and it's not right," Sen. John McCain, R-Ariz., said of the response from the Democrats. "To categorically reject what the House and the speaker are doing - and I think he's pretty courageous in what he's doing - in my view is not serving the American people."
The House had been effectively sidelined in recent days as Reid and Senate Republican Leader Mitch McConnell engaged in intense negotiations to reopen the government and raise the debt limit.
That changed emphatically when details began circulating of some of the elements of the terms under discussion.
In addition to ending the shutdown and raising the debt limit, the two Senate leaders were considering a plan to delay a $63-per-person fee that the health care overhaul would impose on anyone who receives health care coverage under an employer-provided plan.
Some Republicans balked, complaining that was a concession to labor unions who are among the Democrats' most loyal political supporters.
Many unions have announced their opposition to the fee, but so, too, have businesses.
Reid and McConnell also have been discussing provisions to give federal agencies flexibility in adjusting to across-the-board spending cuts imposed under legislation that Obama signed in 2011.
Another element of their negotiations would call for House-Senate negotiations on a possible deficit reduction measure to take the place of the across-the-board cuts.
The twin crises began more than three weeks ago, when some lawmakers in the House insisted on seeking the defunding of Obamacare as the price for preventing a partial shutdown of the government.
The White House refused, and the Democratic-controlled Senate rejected legislation to achieve the GOP goal, as well as subsequent legislation that contained scaled-back concessions on the health care overhaul.
The partial shutdown, which began on Oct. 1, swiftly merged with the approaching debt crisis.
According to Treasury Secretary Jacob Lew, unless Congress acts by Oct. 17, the government will lose its ability to borrow, and would be required to meet its obligations relying only on cash on hand and incoming tax receipts.
While it was unclear how long that would suffice, the date stood as a deadline. The closer it approached, the more urgent became the pleas of businesses and bankers in this country as well as officials overseas for the United States to put its finances into order.
Whatever the outcome, the all-out assault on Obamacare that became a tea party rallying cry last summer was long gone, repulsed by the president and his Democratic allies in Congress.
Instead, Republican disapproval ratings have plummeted in public opinion polls in the past two weeks, vindicating warnings from Boehner, McConnell and other party elders that the original strategy of threatening to shut down the government in hopes of wiping out the overhaul was badly flawed.
"We got ourselves in a ditch," McCain said. "And we got to stop digging."
Beyond Washington, Fitch Ratings said it expected to conclude its review of the nation's top credit rating within six months.
Fitch said it expected the debt limit to be raised soon but added, "The political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default." Fitch is one of the three leading U.S. credit ratings agencies, along with Standard & Poor's and Moody's.
Associated Press writers Donna Cassata, Andrew Taylor, Henry C. Jackson, Julie Pace and Alan Fram contributed to this report.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)