The way out of a budget standoff that threatens to trigger a debt crisis later this week was clouded Tuesday as the House and Senate worked on competing plans to raise the nation’s borrowing limit and fully reopen the federal government.
As Senate leaders tried to put the finishing touches on a bipartisan plan that runs through early 2014, House Republicans considered a new initiative they may bring to the House floor that also avoids a debt crisis but adds provisions opposed by Democrats and the White House.
Many conservatives rejected the agreement taking shape in the Senate that gives Republicans little of what they have been demanding in the two-week political standoff, leading to a confusing set of developments in Congress just as the Treasury is losing maneuvering room in its ability to pay the nation’s bills.
It was unclear when the House might take up the new GOP proposal, which accepts many terms of the Senate plan but would make more substantive changes to the 2010 health law championed by President Barack Obama. While the chamber’s most combative lawmakers, many of them aligned with the tea party, say they want to continue fighting for their policy goals, others in the Republican Party say it is time to reopen the government and end an impasse that many fear has damaged the GOP’s image.
Senate Majority Leader Harry Reid, speaking on the Senate floor Tuesday, said the House GOP proposal can’t pass the Senate and was an attempt by House Republicans to “torpedo” bipartisan Senate efforts to end the budget impasse. Mr. Reid also raised concerns the lingering standoff could soon prompt statements from U.S. ratings firms.
“”Rating agencies are talking about downgrading us as early as tonight,” Mr. Reid said, without elaborating on how he knew what they were considering doing.
Fitch and Moody’s declined to comment on Mr. Reid’s remarks.
“We don’t comment on market speculation,” Fitch said. “The language on what we would potentially do is in our last report.”
Moody’s said: “We wouldn’t comment on the timing of any ratings movement. It’s his opinion.”
Although both the Senate and House plans would fund the government through Jan. 15, 2014, and raise the debt ceiling through Feb. 7, the House plan contains several Obamacare changes and would restrict the Treasury’s ability to work around debt-ceiling deadlines by using extraordinary measures through debt management and shifts in bill payments.
House GOP lawmakers on Tuesday hunkered down behind closed doors in an extended party meeting to discuss the proposal. An hour into the meeting lawmakers kicked out all aides. Dozens of normally chatty lawmakers ducked all questions as they emerged.
House Speaker John Boehner (R., Ohio) after the meeting said “no decisions have been made” about how the House GOP will proceed.
Even before it was publicly aired, the White House rejected the latest House plan.
“Democrats and Republicans in the Senate have been working in a bipartisan, good-faith effort to end the manufactured crises that have already harmed American families and business owners,” White House spokeswoman Amy Brundage said in a statement. “With only a couple days remaining until the United States exhausts its borrowing authority, it’s time for the House to do the same.”
Some House Republicans exiting the GOP session described the new House plan as an effort to resolve the impasse.
“We’re trying to negotiate. We’re trying to move this along,” said Rep. Bill Huizenga (R., Mich.).
Mr. Boehner announced the proposal Tuesday morning in the closed-door caucus meeting in the U.S. Capitol basement.
A senior House GOP aide described the move to Republicans as a take-it-or-leave-it offer to the Senate, not something House leaders expect would be sent back again to them again after being changed by the Senate. A senior Senate Democratic aide said it was unclear how the development would affect the timing of the deal under discussion between the Senate’s leaders.
Rep. Peter King (R., N.Y.) said that he believed the House GOP leaders’ strategy was designed in part to speed up the process of passing legislation by Thursday. For procedural reasons, there will be fewer opportunities for delaying tactics in the Senate if the House acts on the legislation first and sends it to the Senate. Even if the Senate amended the bill and sent it back to the House, Mr. King said he was optimistic that the House would pass the bill with a bipartisan majority even if conservatives vote no.
The Senate’s two top leaders have been negotiating since the weekend on a narrower plan to end the budget standoff. On Monday, Mr. Reid and the Senate’s Republican leader, Mitch McConnell of Kentucky, indicated they were close to reaching an agreement. Details were still in flux, but the Senate plan focused on reopening the government and raising the nation’s borrowing limit into early 2014 while creating a framework for broader budget talks.
Mr. Reid, speaking on the Senate floor Tuesday as the chamber was called into session, said talks with Mr. McConnell continued to produce “productive negotiations,” but he didn’t reference the developments in the House. “I’m confident we’ll be able to reach a comprehensive agreement this week in time to avoid a catastrophic default on the nation’s bills,” he said.
Reps. Charlie Dent (R., Pa.) and Darrell Issa (R., Calif.) and others confirmed the details of the House plan as they left the Republican meeting.
The House bill would also remove a provision of the soon-to-be-announced Senate deal that seeks to delay an annual fee on insurance providers. The $63 fee, which the Senate seeks to delay by a year, is set to be levied on those who provide insurance, including unions and employers.
President Obama called Mr. McConnell on Monday to raise administration concerns over including restrictions in any eventual budget measure that emerges from Congress. Mr. Obama and Treasury Secretary Jacob Lew, who have avoided becoming involved in congressional debt-ceiling talks, are pushing back aggressively against Republican demands that would limit—or strip altogether—the Treasury’s use of “emergency” powers to avoid falling behind on its bills.
Mr. Dent, a leading Republican centrist, said the plan “moves the ball forward” and said he would support it. But he also said he wasn’t sure there were enough votes to pass it. He emphasized the plan’s similarities to the compromise written by Sen. Susan Collins (R., Maine) that was rejected by Senate Democrats over the weekend.
Rep. Michael Burgess (R., Texas) said GOP reaction in the party meeting was “mixed.” He said the conference opened by singing three verses of “Amazing Grace.”
Some House Democrats questioned whether the proposal had enough votes to clear the House and said it would be rejected in the Senate. “Even if it passes the House, it will never pass the Senate,” said Rep. Joe Crowley (D., N.Y.). “What statement is that to the American people, two days before the 17th of October?”