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July 24, 2014

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Specter of debt-ceiling deadline hovers over current stalemate

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J. Scott Applewhite / AP

Senate Majority Leader Harry Reid of Nev., left, and Sen. Tom Harkin, D-Iowa listens to remarks by House Minority Leader Nancy Pelosi of Calif., as they celebrate the start of the Affordable Care Act, popularly known as Obamacare, Tuesday, Oct. 1, 2013, during an event with other lawmakers and people whose lives have been impacted by lack of health insurance, on Capitol Hill in Washington.

Government Shutdown

Resa Mestel, of New York, reacts after finding the Folk Art Center on the Blue Ridge Parkway in Asheville, N.C.,   closed due to the government shutdown Tuesday, Oct. 1, 2013. In the wake of a partial shutdown of the U.S. government, the National Park Service began closing down parks and other facilities until federal funding is restored. Launch slideshow »

As Day Three of the shutdown approaches with no end in sight, Senate Majority Leader Harry Reid sent a letter to House Speaker John Boehner suggesting they resolve their standoff with something that sounds an awful lot like a grand bargain.

Reid told Boehner that if the House passes a short-term budget that doesn’t attack Obamacare, he will appoint senators to a conference committee to hash out almost every contentious issue, including tax reform, health care, agriculture and discretionary spending on veterans, national parks and the National Institutes of Health — areas of the government that the House tried to get refunded through narrow, rifle-shot bills Wednesday.

But there is one thing missing from his list: The debt limit.

Leaders in the House of Representatives have been eyeing the debt ceiling — which the U.S. is presumed to hit on Oct. 17, give or take considering that the government is spending less during a shutdown — as the galvanizing force that will bring the parties together to solve the budget impasse.

“That’s what we think will be the forcing action to bring us together,” Rep. Paul Ryan, R-Wisc., chairman of the House’s budget committee, said this week.

“It’ll have a pretty powerful impact in sobering everybody up around here and getting them around the table to find some common ground,” said Rep. Tom Cole, R-Okla.

The government shutdown is bleak, but the debt ceiling has been hovering over the entire affair like a dark storm cloud that economists warn could rain down utter havoc on the national economy if it is met. Hitting the debt limit means the United States will start to default on its debts and obligations — even coming close to that point in 2011 resulted in a partial downgrading of the U.S.’s creditworthiness.

“People should understand: Ten days from now, we got the big one coming,” Reid said Wednesday at a press conference in which he expressed his hope that Republicans would agree to do “some long-term dealing with the fiscal things in this country.”

But Reid’s pre-condition for getting to that negotiating table is the one thing that Republicans, thus far, have been unwilling to give: A clean short-term budget resolution funding the government.

Instead, House Republicans want Senate Democrats to appoint negotiators to hash out the short-term budget that would restart the federal government. They have proposed offering narrow refunding measures, for highly visible, politically sympathetic areas of government like Veterans Affairs, where veterans access services, and the National Institutes of Health, which runs cancer trials that have been suspended for the duration of the shutdown.

During the first few days of the shutdown, the parties have been digging in more than reaching out to make a deal. Things are particularly bad between Reid and Boehner: Reports that Reid’s chief of staff leaked private emails between himself and Boehner’s chief of staff have poisoned what air of compromise remained around the Capitol, and Reid, by his own admission, hasn’t been talking to Boehner for weeks.

That changed this afternoon, when President Barack Obama summoned Reid and Boehner, along with House Minority Leader Nancy Pelosi, D-Calif., and Senate Minority Leader Mitch McConnell, R-Ky., to the White House for an emergency meeting on a swath of fiscal issues.

But lawmakers emerged from the meeting without a deal in hand.

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