Story Summary

Budget Impasse Forces Partial Shutdown of Federal Government

For the first time in 17 years, the federal government is weathering a shutdown caused by Congress’ inability to pass a budget. Lawmakers are at odds over Obamacare, with Republicans trying to find a way to defund the healthcare mandate.

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SACRAMENTO–

A broad-spectrum of area residents are relieved that the government shutdown is over.

Sixth graders at Sacred Heart Parish School had their hearts set on making a trip to the popular Sly Park science camp, only to be disappointed when the park shut down because of its location in a national forest.

The students cheered when they were notified that the camp would re-open next week – in time for their scheduled trip.

happy the shutdown is over

Students at Sacred Heart were overjoyed to hear that the government reopened just in time for their trip to Sly Park, which temporarily closed its doors due to the government shutdown.

Students from nearly a dozen schools in the area weren’t so lucky. Their trips were cancelled, disrupting vacation time taken by parent chaperones and lesson plans prepared by teachers.

“As the days got closer and the government was still shut down, I kept getting a little bit more nervous and thinking I won’t be able to go,” said Ainsley Carroll, a sixth grader at Sacred Heart.

Seniors who rely on nutrition programs were happy as well because their meal programs were in danger of ending.  Sacramento’s Meals on Wheels program, run by the Asian Community Center, scraped money together to keep the food coming and there was an appeal for private donations.

Seniors who had lunch at the Stanford Settlement’s Meals on Wheels site said they were being taken advantage of by politicians.

“That’s just wrong, it’s so wrong … Sometimes this is the only hot meal we have for the day,” said meal recipient Joanne Hodgkinson.

“The politics is much more than the people that they serve … The people should always be the most important,” said Standford Settlement executive director Sister Jeanne.

U.S. Capitol shines brightly as the Cruz filibuster goes on

The U.S. Capitol (Courtesy: CNN)

(CNN) — The House of Representatives has passed a short-term, bipartisan deal to end the partial government shutdown and avoid a possible U.S. default on the debt.

The Senate approved the deal earlier Wednesday night.

The deal will now go to President Barack Obama’s desk for his signature. The president has already said he would sign the bill “immediately.”

Here’s a look at what happened Wednesday and what to expect in the coming hours:

AFTERNOON MEETINGS: House Republicans and Democrats met Wednesday with their respective caucuses to hear details of the Senate deal, which calls for the government to be funded until January 15 and the debt limit raised until February 7. At the GOP meeting, members gave House Speaker John Boehner a standing ovation.

WRITING THE BILL: As lawmakers hashed out the details, the bill wound up in legislative form.

MOVING THE BILL: The bill moved through the Senate quickly, thanks to special steps taken to expedite.

SENATE VOTE: The bill easily passed the Senate on Wednesday night. True to his word, Republican Sen. Ted Cruz of Texas did not interfere with the deal, but he did criticize its passage.

HOUSE VOTE: The House passed the after Boehner encouraged GOP support. The bill now needs the signatures of Boehner, the Senate’s president pro tempore, the clerk of the Senate and the clerk of the House, among others. Then the bill will be “enrolled properly,” according to the Senate secretary’s office.

PRESIDENT’S SIGNATURE: Typically, bills are sent to the White House accompanied by Senate staff or House staff, depending on where the bill originated. Congressional and White House couriers are also involved in picking up or bringing the bill to the White House for the president’s signature.

LAW: When it is signed, some federal workers could be back on the job this week, and the United States can continue to borrow money to pay its bills. But that’s just a guess. White House spokesman Jay Carney says he does not know how quickly the government can reopen shuttered operations.
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U.S. Capitol shines brightly as the Cruz filibuster goes on

The U.S. Capitol (Courtesy: CNN)

WASHINGTON (CNN) — An agreement to end the partial government shutdown and avoid a possible U.S. default easily passed the U.S. Senate and headed to the House for a vote expected later Wednesday.

If approved by the Republican-led House, the legislation would go to President Barack Obama to be signed into law by the end of Thursday — the deadline for increasing the federal borrowing limit or risk the first default in American history.

Such quick congressional action on a measure announced earlier in the day was in stark contrast to the protracted brinksmanship of recent weeks that led to the shutdown now in its 16th day and brought the threat of default.

The measure represented a victory for Obama and Democrats over conservative Republicans who tried to use the shutdown and debt ceiling deadline to wring concessions on spending cuts and dismantling the Obama’s signature health care reforms.

However, the final agreement worked out by Senate leaders after House Speaker John Boehner was unable to get his own Republican caucus to support a House GOP version lacked any substantive measures sought by political right beyond extending current spending levels until January 15.

It also extended the federal debt ceiling until February 7 and set up budget negotiations between the House and Senate intended to come up with a broader spending plan for the rest of fiscal year 2014, which ends on September 30.

Another provision requiring the government to confirm the eligibility of people receiving federal subsidies under Obamacare was labeled by Democrats and the White House as minor.

“We fought the good fight; we just didn’t win,” Boehner told a radio station in his home state of Ohio.

Both chambers had to take special steps to get the legislation passed that quickly, raising concerns that tea party conservatives led by Sen. Ted Cruz of Texas would block or delay it in a final effort to include provisions intended to harm Obama’s signature health care reforms.

However, Cruz told reporters that he wouldn’t mount a filibuster or employ other procedural moves against the agreement.

At the same time, he criticized his Senate colleagues for what he called their failure to listen to the American people and said the fight against Obamacare would continue.

Democratic Sen. Chuck Schumer of New York blasted Cruz and the rest of the tea party wing in Congress for what he called the “reckless, irresponsible politics of brinksmanship over the last few weeks.”

“It was not America’s finest moment,” Schumer said.

National polls conducted since the start of the shutdown on October 1 indicate that while all sides are feeling the public’s anger over the partisan political impasse, Republicans are getting blamed more than Democrats or Obama.

Boehner and other House Republican leaders told their caucus they would vote for the agreement at an afternoon meeting that participants said ended with a standing ovation for the embattled Speaker.

“Blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us,” Boehner said in a statement. “Our drive to stop the train wreck that is the president’s health care law will continue.”

News of the deal brought some relief to Wall Street as well as Washington, with pressure to resolve the impasse building with the approach of the Thursday deadline to raise the debt ceiling or face default.

Markets soar on agreement

U.S. stocks rose on the news of an agreement, with the benchmark Dow Jones Industrial Average jumping more than 200 points on the day.

Senate Majority Leader Harry Reid hailed the agreement he worked out with his GOP counterpart Mitch McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.”

Obama praised Senate leaders for reaching a compromise, and urged Congress to act quickly, White House spokesman Jay Carney said.

In an expected gesture to hundreds of thousands of federal workers furloughed by the shutdown, the measure provides back pay for wages withheld.

McConnell fired an opening salvo for the budget talks expected to begin soon and continue until December when he said any ensuing spending deal should adhere to caps set in a 2011 law that included forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

The focus on an agreement shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party conservatives for outcomes unacceptable to Obama and Senate Democrats, as well as some fellow Republicans.

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would dismantle or defund the health care reforms known as Obamacare to previous proposals intended to end the shutdown.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was no chance they ever would have succeeded.

Republican Sen. Kelly Ayotte of New Hampshire called the House GOP tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

However, Republican Rep. Steve King of Iowa advocated continued brinksmanship to try to change Obamacare, which conservatives detest as a big-government overreach.

“If we’re not willing to take a stand now, then when will we take this stand?” he told CNN’s “New Day,” adding that if “the conservative Republican plan had been implemented five years ago, say at the inception of what is now the Obama presidency, we would have far less debt and deficit.”

Thursday marks the day the Treasury Department will run out of special accounting maneuvers to keep the nation under the legal borrowing limit. From that point on, it would have to pay the country’s incoming bills and other legal obligations with an estimated $30 billion in cash, plus whatever daily revenue comes in unless Congress acted.

Carney clarified that borrowing authority would continue through Thursday.

According to the best outside estimates, the first day the government would run short of cash without more borrowing authority was between October 22 and November 1.

The prospect of the U.S. government running out of money to pay its bills and, eventually, finding it difficult to make payments on the debt itself, had economists around the world talking about dire consequences. Mutual funds, which are not allowed to hold defaulted securities, might have to dump masses of U.S. treasuries.

Ratings agency Fitch fired a warning shot Tuesday that it may downgrade the country’s AAA credit rating to AA+ over the political brinksmanship and bickering in Washington that have brought the government to this point.

That could help raise interest rates on U.S. debt, putting the country deeper into the red.

Disarray among House Republicans caused confusion on Tuesday, with Boehner having to pull a proposed agreement from the floor because conservatives found it too weak.

The House proposal dropped some provisions on Obamacare but prohibited federal subsidies to the President and his administration officials as well as federal lawmakers and their staff receiving health insurance through the Affordable Care Act programs.

It also would have forbidden the Treasury from taking what it calls extraordinary measures to prevent the federal government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

House Democrats opposed the GOP proposal, which meant it couldn’t pass without support from the 40 or so tea party conservatives, who wanted more spending cuts.

“It just kicks the can down the road another six weeks or two months,” said Rep. Joe Barton, R-Texas.

House Majority Leader Eric Cantor referred to the GOP infighting at Wednesday’s caucus meeting, telling his Republican colleagues to stop beating up on each other, according to participants. Describing Cantor as impassioned, they said he implored the caucus to avoid characterizing each other as good or bad Republicans.

 

By Tom Cohen. CNN’s Ben Brumfield, Greg Botelho, Michael Pearson, Paul Steinhauser, Ashley Killough, Craig Broffman, Jim Acosta, Dana Bash, Deirdre Walsh, Mark Preston, Dan Merica, Brianna Keilar and Janet DiGiacomo contributed to this report.

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U.S. Capitol shines brightly as the Cruz filibuster goes on

The U.S. Capitol (Courtesy: CNN)

WASHINGTON, D.C. (CNN)-

Senate leaders on Wednesday announced a deal to end the partial government shutdown and avoid a possible U.S. default as soon as midnight, and a key GOP conservative said he wouldn’t try to block the measure.

The news of a deal brought some relief to Wall Street as well as Washington, where the shutdown reached a 16th day with the government poised to lose its ability to borrow more money to pay bills on Thursday.

Senate Majority Leader Harry Reid hailed the agreement he worked out with his GOP counterpart Mitch McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.”

Now the question becomes whether the agreement can win approval in the Senate and then the House to reach President Barack Obama’s desk, perhaps by the end of Wednesday to ensure there is enough cash on hand for all U.S. debt obligations and bills.

Obama praised Senate leaders for reaching a compromise, and urged Congress to act quickly, White House spokesman Jay Carney said.

Republican and Democratic members of the House will meet separately in the afternoon to hear details of the proposal as well as weigh the next steps.

House Speaker John Boehner has failed to corral his caucus around any remedy, while House Democrats have solidly supported their leaders.

A senior GOP Senate aide said the Senate vote could come sometime Wednesday evening and a House leadership aide said the House could vote “as early as tonight” following the Senate.

But both chambers will have to take special steps to get the legislation passed that quickly, raising concerns that tea party conservatives led by Sen. Ted Cruz of Texas would block or delay it in a final effort to include provisions intended to harm Obama’s signature health care reforms.

However, Cruz told reporters that he wouldn’t mount a filibuster or employ other procedural moves against the agreement. At the same time, he criticized his Senate colleagues for what he called their failure to listen to the American people and said the fight against Obamacare will continue.

But national polls conducted since the start of the shutdown on October 1 indicate that while all sides are feeling the public’s anger over the partisan political impasse, more blame is pointed at the Republicans in Congress rather than Democrats or Obama.

U.S. stocks opened sharply higher on news of the Senate agreement with the benchmark Dow Jones Industrial Average jumping 200 points.

Short-term plan

Reid said the Senate deal under discussion would reopen the government, funding it until January 15. It also would raise the debt limit until February 7 to avert a possible default on U.S. debt obligations for the first time.

Also, the White House supports a provision in the deal that strengthens verification measures for people getting subsidies under Obamacare, spokesman Jay Carney said.

Carney called the change “a modest adjustment,” and said it didn’t amount to “ransom” for raising the federal debt ceiling because both sides agreed to it and the White House supported it.

In addition, the Senate agreement would set up budget negotiations between the House and Senate for a long-term spending plan.

McConnell fired an opening salvo for those talks, expected to begin soon and continue until December, when he said any ensuing budget deal should adhere to spending caps set in a 2011 law that included forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

Before Wednesday’s announcement, sources told CNN the agreement also would include a provision to strengthen verification measures for people seeking government subsidies under Obamacare.

The focus on an agreement shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party conservatives for outcomes unacceptable to Obama and Senate Democrats, as well as some fellow Republicans.

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would dismantle or defund the health care reforms known as Obamacare to previous proposals intended to end the shutdown.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was no chance they ever would have succeeded.

Republican Sen. Kelly Ayotte of New Hampshire called the House GOP tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

However, Republican Rep. Steve King of Iowa advocated continued brinksmanship to try to change Obamacare, which conservatives detest as a big-government overreach.

“If we’re not willing to take a stand now, then when will we take this stand?” he told CNN’s “New Day,” adding that if “the conservative Republican plan had been implemented five years ago, say at the inception of what is now the Obama presidency, we would have far less debt and deficit.”

Warnings of default

Despite warnings by Obama and economists that a U.S. default would spike interest rates and could have catastrophic impacts at home and abroad, King said he’s not too concerned if the government passes Thursday’s deadline to raise the borrowing limit.

“It’s just a date they picked on the calendar,” he said, adding that the government will still be able to pay the interest on its debt. “I’m more concerned about market reaction than I am of default itself.”

Thursday marks the day the Treasury Department will run out of special accounting maneuvers to keep the nation under the legal borrowing limit. From that point on, it will have to pay the country’s incoming bills and other legal obligations with an estimated $30 billion in cash, plus whatever daily revenue comes in.

The expectation is that the Treasury will be able to pay bills in full for a short time after Thursday, but exactly how long remains unclear. According to the best outside estimates, the first day the government will run short of cash could come between October 22 and November 1.

Officials warn that an unknown is whether creditors such as foreign countries that traditionally roll over their U.S. bond holdings could decide to instead cash out, creating a potentially major payout that the government would lack funds to fulfill.

A break from tradition

If the Senate passes the agreement, Boehner will probably face the decision of whether to allow a vote that he knows can only pass with virtually all Democrats and only a few of his fellow Republicans supporting it.

That would break a Republican tradition known as the Hastert rule. The informal tenet, named after former House Speaker Dennis Hastert, says that the House speaker does not introduce legislation unless a majority of Republicans say they will vote for it first.

It has served to keep proposals off the floor, even if they have the prospect of passing via the votes of Democrats combined with those of some moderate Republicans.

House Republicans have expected Boehner to uphold the rule, which asserts the party’s interests in the chamber, and he has pledged to do so. However, Boehner has previously allowed votes on measures lacking full Republican support at times of similar brinksmanship, such as the fiscal cliff negotiations in late December and early January that raised tax rates on wealth Americans.

“I believe that John Boehner will likely be in a position, where he will have to essentially pass the bill that is negotiated between Sens. McConnell and Reid,” said Republican Rep. Charlie Dent of Pennsylvania, who added that he would vote for the Senate plan.

About 20 Republicans would have to back the Senate plan for it to pass, assuming that virtually all of the chamber’s 200 Democrats also would support it.

Slow process

Even so, it could take a day or two more for a deal to make it through the legislative process. By then, the nation will have run out of borrowing authority.

While tax revenues will continue to stream in, that money will be enough to pay only part of the government’s obligations over time. The impact is unclear in the immediate short term, but over days and weeks, it would mean that government officials would have to pick and choose which bills to pay and which to leave for another day.

The prospect of the U.S. government running out of money to pay its bills and, eventually, finding it difficult to make payments on the debt itself, has economists around the world prophesying dire consequences.

Mutual funds, which are not allowed to hold defaulted securities, may have to dump masses of U.S. treasuries.

Ratings agency Fitch fired a warning shot Tuesday that it may downgrade the country’s AAA credit rating to AA+ over the political brinksmanship and bickering in Washington that have brought the government to this point.

That could help raise interest rates on U.S. debt, putting the country deeper into the red.

Rating agency Standard & Poor’s cut the U.S. credit rating from AAA to AA+ after the 2011 debt ceiling crisis. Moody’s still has the U.S. rated AAA.

Investors around the world appeared to be sitting on the sidelines Wednesday waiting out the day’s debate.

Asian markets ended with mixed results, European markets were down slightly Friday afternoon and U.S. stock futures — frequently taken as an indicator for how U.S. markets will open — were up marginally before trading began Wednesday.

Emergency brake?

Some scholars have suggested that the 14th Amendment to the Constitution gives Obama an emergency brake to stop the default by ignoring what Congress does and borrowing in spite of having reached the debt ceiling.

Section 4 of the amendment states: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Obama has rejected such claims, the Congressional Research Service has said. And other scholars say that by invoking the 14th Amendment in this way, the President would risk breaking other laws.

But the same scholars who say this say they believe that section 4 was formulated to keep politicians from holding the debt hostage in order to impose their political will on the natio

Muddled plan

Disarray among House Republicans caused confusion on Tuesday, with Boehner having to pull a proposed agreement from the floor because conservatives found it too weak.

The House proposal dropped some provisions on Obamacare but prohibited federal subsidies to the President and his administration officials as well as federal lawmakers and their staff receiving health insurance through the Affordable Care Act programs.

It also would have forbidden the Treasury from taking what it calls extraordinary measures to prevent the federal government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

House Democrats opposed the GOP proposal, which meant it couldn’t pass without support from the 40 or so tea party conservatives, who wanted more spending cuts.

“It just kicks the can down the road another six weeks or two months,” said Rep. Joe Barton, R-Texas.

Time running out

Obama was to meet Wednesday with Treasury Secretary Jack Lew, who has been looking for creative ways to cover U.S. financial obligations as the debt ceiling comes down.

On Tuesday, Obama called for House Republicans to “do what’s right” by reopening government and ensuring the United States can pay its bills. “We don’t have a lot of time,” he said.

But he acknowledged Boehner’s difficulty in getting his fellow House Republicans on the same page.

“Negotiating with me isn’t necessarily good for the extreme faction in his caucus,” Obama said, referring to the tea party and its conservative allies. “It weakens him, so there have been repeated situations where we have agreements. Then he goes back, and it turns out that he can’t control his caucus.”

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BreakingNewsWASHINGTON, D.C. (CNN)-

Senate leaders announced on Wednesday that they have reached a deal to end the government shutdown and avoid a possible U.S. default.

Senate leaders hope to complete work Wednesday on the deal reached in that chamber to raise the debt limit and temporarily end the partial government shutdown, Minority Leader Mitch McConnell told reporters. He declined to say whether the Senate or the House would vote first, but Sen. John McCain and Sen. John Hoeven said they expect the Senate to go first.

Check back with FOX40 and FOX40.com as details of the deal surface.

U.S. Capitol shines brightly as the Cruz filibuster goes on

The U.S. Capitol (Courtesy: CNN)

WASHINGTON, D.C. (CNN)-

Senate leaders on Wednesday worked out a deal to reopen the government and avoid a potential U.S. default as soon as midnight, sources told CNN’s Dana Bash and Ted Barrett.

Republican leaders met before a gathering of the Senate’s full GOP caucus and Sen. Kelly Ayotte said an announcement would be coming.

“I understand that they’ve come to an agreement but I’m going to let the leader announce that,” Ayotte said on her way in to the leadership meeting.

Exact details of the Senate plan were not known. Nor was it clear how the Senate and House would proceed in considering the measure.

Both would have to take special steps to get it passed and to President Barack Obama’s desk before the government’s ability to borrow money expires on Thursday.

Legislators dropped hints on their way home on Tuesday that Senate Majority Leader Harry Reid and his Republican counterpart, Mitch McConnell, would quickly finalize an agreement in the works all week.

U.S. stocks opened sharply higher on expectations Washington would end its partisan fiscal impasse. The benchmark Dow Jones Industrial Average climbed toward 200 points.

Short-term plan

According to sources, the Senate deal under discussion would reopen the government, funding it until January 15. It would also raise the debt limit until February 7 to avert a possible default on U.S. debt obligations for the first time.

It also would set up budget negotiations between the House and Senate for a long-term spending plan, and would include a provision to strengthen verification measures for people seeking government subsidies under Obama’s signature health care reforms.

The focus shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party conservatives for outcomes unacceptable to Obama and Senate Democrats, as well as some fellow Republicans.

It remained unclear if the congressional tea party wing led by Sen. Ted Cruz of Texas would continue efforts to force its demands into a congressional deal, perhaps by trying to filibuster or otherwise delay Senate action.

“It’s up to him. I would hope he wouldn’t,” Ayotte, who represents New Hampshire, told CNN’s “New Day.” “Senators can cause to you run out the clock, but what’s he trying to gain at this point? I would hope that whatever comes forward, that we would allow a vote on it as soon as possible.”

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would dismantle or defund the health care reforms known as Obamacare to previous proposals intended to end the shutdown.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was no chance they ever would have succeeded.

Ayotte called the tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

However, Republican Rep. Steve King of Iowa advocated continued brinksmanship to try to change Obamacare, which conservatives detest as a big-government overreach.

“If we’re not willing to take a stand now, then when will we take this stand?” he told CNN’s “New Day,” adding that if “the conservative Republican plan had been implemented five years ago, say at the inception of what is now the Obama presidency, we would have far less debt and deficit.”

Despite warnings by Obama and economists that a U.S. default would spike interest rates and could have catastrophic impacts at home and abroad, King said he’s not too concerned if the government passes Thursday’s deadline to raise the borrowing limit.

“It’s just a date they picked on the calendar,” he said, adding that the government will still be able to pay the interest on its debt. “I’m more concerned about market reaction than I am of default itself.”

Thursday marks the day the Treasury Department will run out of special accounting maneuvers to keep the nation under the legal borrowing limit. From that point on, it will have to pay the country’s incoming bills and other legal obligations with an estimated $30 billion in cash, plus whatever daily revenue comes in.

The expectation is that the Treasury will be able to pay bills in full for a short time after Thursday, but exactly how long remains unclear. According to the best outside estimates, the first day the government will run short of cash could come between October 22 and November 1.

Officials warn that an unknown is whether creditors such as foreign countries that traditionally roll over their U.S. bond holdings could decide to instead cash out, creating a potentially major payout that the government would lack funds to fulfill.

A top GOP Senate aide said Wednesday that leaders in that chamber remain “optimistic an agreement can be reached,” the same tone sounded Tuesday after lawmakers called it a night around 10 p.m. Senate staffers burned midnight oil to draft a framework bill.

A break from tradition

If the Senate passes an agreement, House Speaker John Boehner will probably face the decision of whether to allow a vote that he knows can only pass with virtually all Democrats and only a few of his fellow Republicans supporting it.

That would break a Republican tradition known as the Hastert rule. The informal tenet, named after former House Speaker Dennis Hastert, says that the House speaker does not introduce legislation unless a majority of Republicans say they will vote for it first.

It has served to keep proposals off the floor, even if they have the prospect of passing via the votes of Democrats combined with those of some moderate Republicans.

House Republicans have expected Boehner to uphold the rule, which asserts the party’s interests in the chamber, and he has pledged to do so. However, Boehner has previously allowed votes on measures lacking full Republican support at times of similar brinksmanship, such as the fiscal cliff negotiations in late December and early January that raised tax rates on wealth Americans.

“I believe that John Boehner will likely be in a position, where he will have to essentially pass the bill that is negotiated between Sens. McConnell and Reid,” said Republican Rep. Charlie Dent of Pennsylvania, who added that he would vote for the Senate plan.

About 20 Republicans would have to back the Senate plan for it to pass, assuming that virtually all of the chamber’s 200 Democrats also would support it.

Slow process

Even so, it could take a day or two more for a deal to make it through the legislative process. By then, the nation will have run out of borrowing authority.

While tax revenues will continue to stream in, that money will be enough to pay only part of the government’s obligations over time. The impact is unclear in the immediate short term, but over days and weeks, it would mean that government officials would have to pick and choose which bills to pay and which to leave for another day.

The prospect of the U.S. government running out of money to pay its bills and, eventually, finding it difficult to make payments on the debt itself, has economists around the world prophesying dire consequences.

Mutual funds, which are not allowed to hold defaulted securities, may have to dump masses of U.S. treasuries.

Ratings agency Fitch fired a warning shot Tuesday that it may downgrade the country’s AAA credit rating to AA+ over the political brinksmanship and bickering in Washington that have brought the government to this point.

That could help raise interest rates on U.S. debt, putting the country deeper into the red.

Rating agency Standard & Poor’s cut the U.S. credit rating from AAA to AA+ after the 2011 debt ceiling crisis. Moody’s still has the U.S. rated AAA.

Investors around the world appeared to be sitting on the sidelines Wednesday waiting out the day’s debate.

Asian markets ended with mixed results, European markets were down slightly Friday afternoon and U.S. stock futures — frequently taken as an indicator for how U.S. markets will open — were up marginally before trading began Wednesday.

Emergency brake?

Some scholars have suggested that the 14th Amendment to the Constitution gives Obama an emergency brake to stop the default by ignoring what Congress does and borrowing in spite of having reached the debt ceiling.

Section 4 of the amendment states: “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Obama has rejected such claims, the Congressional Research Service has said. And other scholars say that by invoking the 14th Amendment in this way, the President would risk breaking other laws.

But the same scholars who say this say they believe that section 4 was formulated to keep politicians from holding the debt hostage in order to impose their political will on the natio

Muddled plan

Disarray among House Republicans caused confusion on Tuesday, with Boehner having to pull a proposed agreement from the floor because conservatives found it too weak.

The House proposal dropped some provisions on Obamacare but prohibited federal subsidies to the President and his administration officials as well as federal lawmakers and their staff receiving health insurance through the Affordable Care Act programs.

It also would have forbidden the Treasury from taking what it calls extraordinary measures to prevent the federal government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

House Democrats opposed the GOP proposal, which meant it couldn’t pass without support from the 40 or so tea party conservatives, who wanted more spending cuts.

“It just kicks the can down the road another six weeks or two months,” said Rep. Joe Barton, R-Texas.

Time running out

Obama will meet Wednesday with Treasury Secretary Jack Lew, who has been looking for creative ways to cover U.S. financial obligations as the debt ceiling comes down.

On Tuesday, Obama called for House Republicans to “do what’s right” by reopening government and ensuring the United States can pay its bills. “We don’t have a lot of time,” he said.

But he acknowledged Boehner’s difficulty in getting his fellow House Republicans on the same page.

“Negotiating with me isn’t necessarily good for the extreme faction in his caucus,” Obama said, referring to the tea party and its conservative allies. “It weakens him, so there have been repeated situations where we have agreements. Then he goes back, and it turns out that he can’t control his caucus.”

The-CNN-Wire
™ & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

U.S. Capitol shines brightly as the Cruz filibuster goes on

The U.S. Capitol (Courtesy: CNN)

WASHINGTON, D.C. (CNN)-

Disarray among House Republicans surfaced Tuesday as the Senate closed in on an agreement to reopen the government and avoid a possible U.S. default as soon as this week.

House Speaker John Boehner was “struggling” to come up with enough votes to pass a GOP counter-proposal to the Senate plan, a House Republican leadership aide and other sources told CNN’s Dana Bash and Deirdre Walsh.

After a two-hour meeting with his caucus that lasted twice as long as scheduled, Boehner told reporters there was no final decision on what the GOP-led House would do.

“There are a lot of opinions about what direction to go. There have been no decisions about what exactly we will do,” he said.

In a possible signal that he would proceed on a plan opposed by the GOP tea party conservative wing, Boehner declared that “the idea of default is wrong and we shouldn’t get anywhere close to it.”

Senate leaders from both parties say a deal is near to temporarily fund the government to end a partial shutdown now in its 15th day and raise the federal borrowing limit to ensure that all bills can be paid.

The deadline for increasing the debt ceiling is Thursday, according to the Treasury, and economists warn that failure to act in time would spike interest rates with possible catastrophic impact at home and abroad.

However, House Republicans were considering their own proposal that would tack on provisions changing President Barack Obama’s signature health care reforms in what appeared to be a last-gasp effort to influence the proposed Senate agreement.

According to GOP sources and confirmed by Republican Rep. Darrell Issa of California, the House plan under consideration would include most of what is in the Senate proposal while adding a provision to suspend an Obamacare tax on medical devices for two years and remove federal health care subsidies for Obama and legislators when they obtain health coverage under the reforms.

In addition, the House proposal would forbid the Treasury from taking what it calls extraordinary measures to prevent the government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

Senate Majority Leader Harry Reid and other Democrats immediately slammed the House GOP leadership for what they called a reckless brinksmanship maneuver.

“Extremist Republicans in the House of Representatives are attempting to torpedo the Senate’s bipartisan progress with a bill that can’t pass the Senate,” Reid said on the Senate floor.

He earlier said he was “confident we will be able to reach a comprehensive agreement this week,” reiterating the optimism he expressed Monday night that raised hopes among investors, world leaders and regular Americans that the shutdown stalemate was nearing an end.

The White House also rejected the House proposal and signaled support for efforts to reach a compromise in the Senate.

Obama “is pleased with the progress we’ve seen in the Senate,” White House spokesman Jay Carney said.

“We hope Congress will act quickly to resolve these issues,” Carney added, while still cautioning that “we are from a deal at this point.”

Wall Street did not take the fresh tumult in Washington in stride with stocks down in afternoon trading.

Obama spoke Monday with McConnell, according to a GOP Senate aide, but the White House canceled a planned meeting with congressional leaders in what was perceived as a move to give Reid and McConnell room to negotiate.

Sen. Bob Corker, R-Tennessee, said it was time to get a deal done after lengthy delays he blamed on the unrealistic goal of gutting Obama’s signature health care reform law.

“The fact is we’ve got to figure out a way to move ahead,” he told CNN’s “New Day” on Tuesday. “In fairness, on our side of the aisle, we’ve wasted two months, focused on something that was never going to happen.”

However, the House GOP decision to offer a counter-proposal promised further delay toward final congressional action on an agreement.

House Democrats immediately criticized the GOP plan, with Rep. Xavier Becerra of California calling it a “reckless attempt to try to circumvent what the Senate is doing” so close to the deadline for a possible U.S. default.

“That to me seems very irresponsible, and it certainly falls far short of being common sense,” he said.

Two senior House GOP sources told CNN’s Walsh that the counter-proposal would pass in a way that allows the Democratic-led Senate to strip provisions with a simple majority.

Walsh and CNN Chief Congressional Correspondent Dana Bash explained that would make it harder for tea party conservatives such as GOP Sen. Ted Cruz of Texas to delay or derail the agreement.

The significance of having the House go first became clear later Tuesday when sources in both parties told CNN that senators working on the agreement put their work on hold temporarily as Reid and McConnell waited to see how the House proceeds.

Meanwhile, Cruz had a dinner meeting on Monday night with House conservatives to discuss the the emerging Senate deal and how to react, according to a source familiar with the gathering a Capitol Hill restaurant.

The congressional negotiations are being closely watched by other nations, which would also feel the impact should the United States run out of money to pay some of its bills.

Jon Cunliffe, who will become the deputy governor of the Bank of England, told British lawmakers over the weekend that banks should begin planning for contingencies.

The partial shutdown has proved costly. Hundreds of thousands of federal employees are either idle at home or not being paid while working.

And officials warn that tough choices are ahead about which bills to pay and which to let slide, should the shutdown and debt ceiling debate drag on.

So far, the standoff has cost the economy about $20 billion in gross domestic product, CNN’s Christine Romans reported Tuesday on “New Day,” citing Mark Zandi of Moody’s Analytics. GDP is a measure of the goods and services produced by an economy.

At a visit Monday to a local food pantry, Obama warned of what he called continued partisan brinkmanship by House Republicans who “continue to think that somehow they can extract concessions by keeping the government shut down or by threatening default.”

The finer points

Reid and McConnell have to reach a resolution on two critical issues: ending the shutdown that began on October 1 and raising the debt ceiling so the U.S. can borrow more money to pay all the government’s bills.

Democrats want an increase in the debt ceiling to last for several months, to avoid similar showdowns in coming months.

At the same time, they want a spending plan to reopen the government, but one that will be temporary. This will allow them to work toward a longer-term agreement that can negate the effects of the forced sequestration cuts.

Republicans want the opposite.

They want a longer spending proposal that would lock in the planned sequestration cuts in coming months. And they want a shorter debt ceiling extension in order to negotiate further deficit reduction measures.

At his visit to the Martha’s Table food pantry in Washington, Obama warned that a default — in which the government would lack enough cash on hand to pay down its debt obligations, as well as other daily bills such as Social Security checks — “could have a potentially devastating effect on our economy.”

Details fluid

Democratic sources told CNN that the proposal under consideration by Reid and McConnell would fund the government through January 15, allowing it to reopen for at least three months or so.

At the same time, negotiations on a budget for the full fiscal year would have a deadline of sometime in December, the sources said.

Meanwhile, the debt ceiling would be increased through February 7 to put off the threat of default for almost four months, according to sources in both parties.

The budget negotiations were expected to address deficit reduction measures and therefore could affect when the debt limit would need to be increased again.

In addition, provisions involving the 2010 Affordable Care Act known as Obamacare could be included, such as strengthening verification measures for people seeking federal subsidies to help them purchase health insurance required by the law, the sources said.

Another possible change to the health care reforms would delay a fee on employers, unions and other plan sponsors that raise money to compensate insurance companies for taking on high-risk customers in the early years of Obamacare.

CNN political analyst John Avlon said Monday that Democrats wanted to press what they perceive as an advantage over Republicans on how the public regards the latest round of Washington budget and deficit brinkmanship.

“What’s behind it (are) poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship,” Avlon said.

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SACRAMENTO—

Veterans and the active military are sick of being used by their federal government as a political pawn.

“It’s disgusting. I am absolutely disgusted and I know there are a lot of people that share that exact sentiment,” said Sacramento native and armed forces veteran Scott Raab.

Raab went to Washington D.C. this past weekend to take back their monuments.

“My message was very simple: I am veteran, I am a concerned citizen, and it’s outrageous to think those barriers could stand up and block the people that they were meant to honor… Thankfully, we had been there to talk those barricades down,” Raab said.

Raab is also part of Move America Forward, an organization that sends care packages to soldiers fighting overseas. He spoke at the rally and demanded change.

“Very simple: fund the VA, fund our veterans. Don’t use us as a political prop,” Raab said.

Raab says the VA will run out of money to help veterans in a little over two weeks – a short window for our government to get their act together.

“These guys depend on the VA. It needs to be funded; there is no politics in it. Barack Obama, Harry Reid need to understand that and they need to do the right thing and take care of our veterans.”

U.S. Capitol shines brightly as the Cruz filibuster goes on

The U.S. Capitol (Courtesy: CNN)

WASHINGTON, D.C. (CNN)-

Possible compromise or more political harrumphing?

Senators from both parties negotiating a possible agreement to end the partial government shutdown and avoid a U.S. default this week said Monday they were making progress, and top congressional leaders were headed to the White House later in the afternoon for a meeting with President Barack Obama.

Democratic Sen. Joe Manchin of West Virginia told CNN the deal was 70% to 80% done, while Republican Sen. Bob Corker of Tennessee cited progress in the talks with Manchin and other colleagues from both parties.

“I’m more optimistic today at 9:50 (a.m.) than I was at last night when I went to bed,” Corker told reporters.

However, Manchin and moderate GOP Sen. Susan Collins of Maine, who have spearheaded the bipartisan talks, warned more work needs to be done.

“We’re making progress toward an agreement, but we’re not there yet,” Collins said.

According to Manchin, party leaders must work out vital specifics, signaling the still shaky prospects for completing an agreement before Thursday’s deadline for Congress to give the government authority to borrow more money to pay all its bills.

The framework under discussion is similar to a plan first floated last week by Manchin and Collins, which Senate Democratic leader Harry Reid initially rejected.

It would temporarily fund the government to end the shutdown that started October 1 and also raise the federal borrowing limit for a limited period.

At the same time, the proposal would set up House-Senate negotiations on a budget for fiscal year 2014, and delay for two years a tax on medical devices imposed under Obama’s signature health care reforms, Manchin said.

In another provision involving the 2010 Affordable Care Act known as Obamacare, the proposed compromise would strengthen verification measures for people getting federal subsidies to purchase health insurance.

“We’re going to continue to meet throughout the day, and the conversations have been very constructive,” Collins said.

Manchin told CNN’s “New Day” that Reid and Senate Republican leader Mitch McConnell “need to put the numbers to it.”

Early pushback from conservatives focuses on the budget talks, which would include flexibility to soften or eliminate forced spending cuts known as sequestration that were part of the agreement that resolved the last congressional showdown over the debt ceiling in 2011.

Corker said Democrats have retreated from a weekend push for the deal to wipe out the sequestration cuts, signaling progress on an issue that could have derailed agreement by both the Democratic-led Senate and the Republican-led House.

“It appeared the Democrats had wandered off the reservation and overreached over the last 48 hours,” said Corker, a veteran of many congressional budget battles.

CNN political analyst John Avlon said Monday that Democrats wanted to press what they perceive as an advantage over Republicans on how the public is perceiving the latest round of Washington budget and deficit brinksmanship.

“What’s behind it (are) poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship,” Avlon said.

Manchin said the brinksmanship was a chance to address what he called the “draconian cuts” of sequestration.

A new round of the across-the-board spending cuts for the military and other non-entitlement programs takes effect on January 15, he said.

As reported by CNN Chief Congressional Correspondent Dana Bash and CNN Senior White House Correspondent Jim Acosta, the main sticking point for now involves how long an agreement would fund the government to end the shutdown and increase the debt limit to enable required federal borrowing.

Democrats want the debt ceiling increase to extend through the November 2014 congressional elections to avoid similar showdowns in coming months.

At the same time, they seek a temporary spending plan to reopen the government while formal budget negotiations work out a longer-term agreement that can negate the impacts of the forced sequestration cuts.

Republicans, however, want a longer spending proposal that would lock in the planned sequestration cuts in coming months, with a shorter debt ceiling extension in order to negotiate further deficit-reduction measures.

Reid and McConnell along with other top senators began discussions over the weekend.

The Senate will meet again Monday at 2 p.m. ET, while the House comes back into session at noon ET.

A White House official said Obama would meet with the top Republican and Democratic congressional leaders at 3 p.m.

“With only a few days until the government runs out of borrowing authority, the President will make clear the need for Congress to act to pay our bills, and reopen the government,” the official said. “The President will also reiterate our principles to the leaders: we will not pay a ransom for Congress reopening the government and raising the debt limit.”

Watching developments closely in Washington, Wall Street greeted news of apparent progress positively. Stock indexes gained in afternoon trading after sharp early losses to start the week.

Mindful of the economic impact, senators from both parties expressed optimism a deal was in reach.

“I believe we can do it,” Democratic Sen. Dick Durbin of Illinois said on NBC’s “Meet the Press.” “I hope sensible people prevail, because at this point, it’s not just a shutdown and all of the damage it’s caused, but if we default on our debt, it will have a dramatic impact on the savings account, on the retirement account of average Americans.”

On the other side of the aisle, Republican Sen. Rob Portman of Ohio said he also thinks Congress will find a way out of the crisis before Thursday, when the United States hits the debt ceiling.

“We will have decided as a Congress that we need to avoid going over the debt limit, and we’ll figure it out. And it will probably be a relatively short-term solution,” Portman said.

A weekend of rejections

Despite the positive prognoses, the only actions over the weekend involved one “no” after another.

• Reid said Saturday the plan Collins was assembling was no longer on the table, because it treated reopening the government as a “concession.” Reid continues to demand that any plan include a “clean” bill, one that raises the debt limit and reopens the government with no strings attached. However, Manchin’s comments Monday indicated the Collins plan remained alive.

• Republicans blocked a measure to extend the debt limit with no strings attached, refusing to support a procedural vote that would have brought it to the Senate floor.

• House Republican leaders said Obama rejected their proposal for a six-week extension of the federal debt ceiling.

• Meanwhile, Republicans objected to the prospect being floated over the weekend that the forced spending cuts of sequestration, which have cut deeply into federal operations since March, might be rolled back under any eventual deal.

The Treasury Department said it will be unable to pay the government’s bills unless the debt limit is increased by Thursday.

Christine Lagarde, head of the International Monetary Fund, said Saturday the consequences of a failure to raise the debt limit would be dire for economies around the world. She spoke to CNN’s Richard Quest at an Institute of International Finance conference in Washington.

“You know, I’ve just spent the last two days with representatives of about 188 countries around the world. I wouldn’t say they are confident. I would say they are concerned, and they are very anxious to see this crisis resolved, because they know it’s going to impact on their economy,” Lagarde said.

Obama spoke by phone with House Minority Leader Nancy Pelosi on Sunday to discuss the ongoing battle over the shutdown, the White House said. The two agreed on the need for a “clean debt limit increase” and a “clean continuing resolution to open up the government and end the shutdown.”

Mindful that the Thursday deadline is days away, House Republican leaders are considering all their options even as Republican and Democratic Senate leaders try to craft a deal on the debt ceiling, said a GOP leadership aide, speaking on the condition of anonymity.

One option Republican leaders are considering is sending back a measure to the Senate that would increase the debt limit; exactly what it would contain is unknown at this time.

But the aide noted that the House is able to move quicker than the Senate, and this idea could come into play. If a decision were made to pursue this idea, then it would require Democratic support to pass in the House.

Senate Democrats meet with president

Senate Democrats met with Obama for 75 minutes Saturday afternoon, and a Senate Democratic leadership aide said the party is unified.

“Democrats are willing to negotiate on anything Republicans want to discuss as soon as we reopen the government and pay our bills,” said the aide.

Another Democratic source said party leaders regard Republicans as lacking a coherent position. They hope McConnell can “cut through the clutter,” the source told CNN’s Dana Bash.

The sources, who are familiar with the talks, spoke on the condition of anonymity so they could speak candidly.

Even as he demanded a “clean” bill, Reid said he and McConnell are involved in “cordial” and “preliminary” discussions.

“I hope that our talking is some solace to the American people and the world,” Reid said. He said McConnell had approached him. “This hasn’t happened until now,” Reid said.

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