Senate Nears Deal That Kicks The Can Down The Road, Accomplishes Little Else
The deal emerging out of the talks between Senator Reid and Senator McConnell is about what you'd expect, but it's probably the best we can expect right now.
With under 48 hours left before the United States hits the Treasury Department’s deadline on the debt ceiling, and the government shutdown entering its 15th day (thus making it third longest such shutdown since 1976), it has become apparent that Harry Reid and Mitch McConnell will be presenting the Senate with a deal that accomplishes little more than reopen potential disaster and get the government back normal operating function:
WASHINGTON — Senate leaders neared the completion Monday night of a bipartisan deal to raise the debt ceiling and end the government shutdown while the rest of the world braced for the possibility of an American default that could set off a global financial disaster.
Negotiators talked into the evening as senators from both parties coalesced around a plan that would lift the debt limit through Feb. 7, pass a resolution to finance the government through Jan. 15 and conclude formal discussions on a long-term tax and spending plan no later than Dec. 13, according to one Senate aide briefed on the plan.
But while both Senator Mitch McConnell of Kentucky, the Republican leader, and Senator Harry Reid of Nevada, the Democratic leader, praised the progress that was made in the Senate, it was already clear that the most conservative members of the House were not going to go along quietly with a plan that does not accomplish their goal from the outset of this two-week-old crisis: dismantling the president’s health care law.
“We’ve got a name for it in the House: it’s called the Senate surrender caucus,” said Representative Tim Huelskamp, Republican of Kansas. “Anybody who would vote for that in the House as Republican would virtually guarantee a primary challenger.”
There have been other showdowns between Republican lawmakers and President Obama that went to the last minute; in 2011, lawmakers reached a deal to raise the nation’s debt ceiling two days before officials said a default was possible, resulting in a stock market plunge and the downgrading of the nation’s credit rating. But the real possibility that as of Thursday the government would not be able to meet its obligations prompted grim warnings of an economic catastrophe that could ripple through stock markets, foreign capitals, corporate boardrooms, state budget offices and the bank accounts of everyday investors.
Officials at the White House and the Treasury have said that contingency plans are in place, though they have repeatedly declined to provide details about which obligations would be met and which would be abandoned. Market participants said such plans would most likely include a plan to shore up short-term funding markets that rely on government debt.
As they drafted their deal, Senate negotiators in both parties were hoping that House Republican leaders would have no choice but to let a bipartisan agreement come to a vote, even if it could pass only with votes from Democrats and a minority of the Republican majority. But John A. Boehner, the House speaker, provided no assurances on Monday that an arrangement hammered out by his Senate colleagues could pass muster among his conservatives.
Senate Republicans had pushed for an agreement that included a provision to delay or repeal a tax on medical devices, but that became a sticking point in the negotiations and will almost certainly be excluded from the final deal, Senate aides said. But the deal is likely to include a one-year delay of another tax associated with the Affordable Care Act known as the reinsurance tax, which employers pay.
Another Republican-backed measure likely to be in the deal would require tighter income verification standards for people who receive subsidies under the new health care law. Under the new guidelines, the Health and Human Services secretary would have to certify that the department can verify income eligibility. The two provisions are the only mentions of the health care law whose defunding has been at the core of Republican demands over the past two weeks.
David Graham summarizes the deal like this:
Here’s the basic outline of the plan, according to reports from multiple outlets:
- The government is funded through January 15.
- The debt ceiling is raised through February 7.
- There are two minor changes to Obamacare: There will be stronger verification of incomes for those applying for insurance subsidies, a Republican wish; and a reinsurance fee in the law will be delayed for one year, a Democratic desire.
- A bipartisan conference committee on the budget is supposed to finish formal negotiations on a long-term plan to fund the government and reform the tax code by mid-December, with the goal of replacing further planned cuts from sequestration.
The deal is the product of talks between Senate Majority Leader Harry Reid, who has been the enforcer of Democratic Party unity throughout the crisis, and Minority Leader Mitch McConnell, who had appeared to be mostly on the sidelines.
Is this deal good for the country? It depends what you mean. Assuming the plan succeeds, it’s certainly preferable to shutdown and default, but it looks a lot like another punt by Congress, pushing the issues just a little bit down the road. How optimistic are you about a bipartisan, bicameral budget committee’s chances, given the Supercommittee’s showing? How excited are you for another shutdown in January? Or another debt-ceiling crisis in February?
Graham is right, of course. This isn’t a plan that actually solves any problems, certainly not any of the underlying fiscal issues that this country has to deal with sooner rather than later. Rather than fully funding the government as the Federal budget laws require to have been done by September 30th, it only funds the government or another three month. For the third time in just over a year, it pushes the debt ceiling out just long enough for us to be able to say that there is no imminent default/cash flow crisis, at least not for the time being. Much to the chagrin of the conservatives whose doomed and, in the end idiotic, strategy of trying to take down the PPACA via the budget process, it does nothing significant to Obamacare, not even the repeal of the bipatrisan-ly reviled medical device tax. And, to top it all off, we get yet another “supercommittee” that will spend the time between now and the end of the year meeting to come up with yet another “Grand Bargain” that will solve all of our problems. In 2010, it was called Bowles-Simpson, in 2011 it was the Budget Control Act’s “supercommittee.” Bowles-Simpson saw its recommendations tossed into the garbage can. The BCA “supercommittee” failed miserably. No doubt, we’ll hear people tell us that, this time, things will be different and they’ll be able to come up with an agreement, but only a Pollyanna would believe that the more likely outcome is that we’ll be dealing with this same crisis all over again when January and February roll around.
Before we get there, though, this deal has to pass two chambers of Congress, and that’s what’s going to make the next 48 hours or so a very interesting and bumpy ride to say the least.
As was the case with the “clean” CR, passage in the Senate seems far more likely than the House to pass this deal, the question in that chamber is going to be how long its going to take to get it done. Last night, Senator Ted Cruz refused to answer a reporter’s question about whether he would attempt to delay or block a Senate bill that didn’t touch Obamacare, and he was seen meeting at a Capitol Hill hangout called Tortilla Coast with a group of Tea Party House conservatives. Under regular Senate rules, Cruz could slow down the process of passage significantly by objecting to a unanimous consent request, thus requiring Reid (and McConnell) to go through the normal debate procedure that would mean that a final vote would be unlikely before sometime early on Friday. Alternatively, though, Reid could chose to use this vote as an opportunity to test the new procedures put in place earlier this year as a means of limiting filibusters on important legislation, although that road also carries risks with it:
Back in January, the Senate set up a new procedure for the 113th Congress that would allow Majority Leader Harry Reid to truncate the process of limiting debate on legislative business.
The Nevada Democrat has yet to deploy it though, because it could create new unpredictability for both Reid and his GOP counterpart, Minority Leader Mitch McConnell of Kentucky.
In short, the resolution created a way around the usual process which forces the Senate to spend days on breaking a filibuster of a motion to proceed. But it also requires Reid allows each party to offer two amendments. The agreement came about as part of the deal to avoid use of the “nuclear option” to change the Senate’s rules with a simple majority vote. As summarized by CQ Roll Call in January:
Eliminates the right to filibuster a motion to proceed if the majority leader permits up to four amendment votes.
If the majority leader wants to bring up a bill, he can get a vote to do so four hours after he files a motion to proceed.
At least two amendments from the majority and two from the minority must be allowed.
If one of the first four amendments isn’t germane to the bill, it will be subject to a 60-vote threshold for passage.
How exactly the amendment opportunities get allocated under the process is a bit of an open question. However, Reid could no doubt line up an amendment vote on the agreement he hammers out with McConnell.
That might move the process along more quickly, since Reid could take a House measure that’s sitting on the calendar containing revenue language and move it through the chamber more quickly.
One complicating factor here would be deciding what Amendments get voted on and how that impacts how quickly matters move through the Senate, but it would allow Reid to bypass the problems that could arise if Cruz and others in the Senate decided to try to slow the process down or, although it would be unlikely to succeed, to block the legislation altogether. Essentially, though, if Reid and McConnell come out today with a deal that they both endorsed, then the bill will pass the Senate, the only question is how long it will take.
The House of Representatives, though, is another matter.
First there’s the matter of whether or not the House would accept the Senate deal as-is, or whether they’d demand changes which would slow the passage process down. NRO’s Robert Costa reports this morning that the House GOP seems more likely to ask for changes rather than accept the Reid-McConnell plan as-is. What those changes are and how the Senate would handle them is, of course, an important question. Those questions, of course, can’t really be answered until the legislative process starts to move forward, but we’re likely to get some hints this morning when the entire House GOP Caucus meets at the Capitol to determine its next step forward.
Unlike the Senate, of course, there will be little that even the most determined minority of Tea Party Republicans will be able to do to stop legislation if the Leadership wants to push it to the floor for a vote. That said, initial comments from those members of the group who were actually on the Hill yesterday were less than complementary. As noted above, Congressman Tim Huelskamp called supporters of the deal members of a “surrender caucus” before he even knew what was in the bill, and there have been similar comments from others of his ilk. The fact that members of this group were apparently plotting with Cruz last night is an indication that they’re still not necessarily ready to give up. The real question will be whether Boehner and the rest of the House GOP Leadership are willing to risk a leadership fight by bringing to the floor a bill that large numbers of Republicans will vote against. My personal guess is that they will. If they’ve done it in the past over Sandy Relief and the Violence Against Women Act renewal, there’s really no reason they wouldn’t do it this time when the stakes are so much higher. The fireworks that happen between now and then, and then thereafter, though, will be interesting to watch.
One thought that does occur, though, is that the House Republican Caucus really has no cause to object to the content of this deal. Yes, it’s likely to be just another exercise in kicking the can down the road (if that were an Olympic Sport, our Congress would be winning all the medals). Yes, it’s going to result in the creation of yet another committee with grandiose dreams that’s far more likely to disappoint than accomplish anything. And, no, it doesn’t really accomplish anything substantive in and of itself. However, it’s likely the best that can be done at this point. Had Congress been spending time over the summer, and in September, dealing with some of these issues then perhaps it would be a different story. However, instead, they allowed themselves get led to the blind alley of the Ted Cruz/Mike Lee/Freedomworks/Heritage Action “Defund Obamacare” strategy even when it was blindingly obvious that it couldn’t succeed. Now, when it’s obvious that some action must be taken there really isn’t any option left other than to kick the can down the road, again, and hope beyond hope that our Senators and Representatives will find a way to do something they haven’t shown the ability to do in at least the last four years. Govern.
Update: The House GOP Caucus meeting isn’t set to start until 9am EDT, but there’s already reports that the natives are restless.
Conservatives are revolting this morning in the House, will not accept Senate deal, decisions/calls in 6-8am range sealed fate among 50 Bloc
— Robert Costa (@robertcostaNRO) October 15, 2013
On the one hand, losing as many as 50 House GOPers would be a bit embarrassing to Boehner and the Leadership, but that leaves some 180 or more who would be voting with them. Along with the inevitable Democratic votes, that would be more than enough to pass the bill. Stay tuned.
Further details from Costa:
A flurry of phone calls and meetings last night and early this morning led the consensus among the bloc of approximatley 50 Republicans who form the House GOP’s right flank. They’re furious with Senate Republicans for working with Democrats to craft what one leading Tea Party congressman calls a “mushy piece of s—t.” Another House conservative warns, “If Boehner backs this, as is, he’s in trouble.”
But that’s unlikely to happen. As of 8:30 a.m., House conservatives believe the leadership is well aware of their unhappiness, and they expect Boehner to talk up the House’s likely next move: another volley to the Senate, which would extend the debt ceiling, reopen the government, and set up a budget conference, as well as add a series of conservative-policy demands that are “stronger,” as one aide puts it, than the current Senate outline.
“What they’ll come up with in the Senate will not get the support of most House Republicans,” says a House conservative strategist. “ And thus, after a lot of hand-wringing, it’ll be DOA. Just like with BCA in 2011, the most important question is, what can pass the House? Everything else is subordinate to that. So, while the Senate is taking the lead right now, I expect the focus will soon shift back to the House, and back to the idea of doing a 6-week extension of the debt ceiling. While Obama and Reid won’t like it, they don’t want to go past Oct. 17 either – the politics of the debt ceiling are different from the shutdown. And so, [we feel] they’ll reluctantly accept it as a stopgap measure.”
Meanwhile, the clock keeps ticking.
‘Cause both sides do it, dontcha know.
See? This is why we can’t have nice things. For the Tea Party types, compromise = “surrender.” In a system built from the beginning to require compromise, this is a very bad way to look at it.
Doug,in many ways, this deal would be a Tea Party victory; they would have normalized these techniques.
The more I watch this, the more it looks like the Teahadists don’t actually believe that anything exists outside the US. US default? Hooray! So what if it causes the US dollar to stop being the reserve currency? NIH scientists getting fed up with this continuous on/off again funding, to the point that they decide to look for employment outside the US? Who cares? Who needs all that science and technology stuff anyway?
If China wanted to really play a long-term chess game with us, it would immediately set up several national projects to develop the scientific equivalents of going to the Moon and offer fat salaries to anyone, world-wide, who would come work for them.
So basically they have agreed to do what Democrats have requested 18 times in the last year.
And yet the Tea Stain is going to put the kabosh on it.
Boehner will have to bring this to the floor without them…or destroy the Republican party in the Process.
Think of the parks, fer chrisakes….
Apparently, you do negotiate with terrorists, arsonists, extortionists, etc. Good to know.
The can needs to be kicked down the road. This deal is for 3 to 4 months or respite. It certainly isn’t my ideal. I think funding should’ve been for more like 6 months and I’d of course like to see some sort of permanent solution that takes the debt ceiling off the table as a weapon (Gephart rule, extended McConnell rule, whatever).
I do not like this part:
I grant that, theoretically, this is both sides getting something. And, on the off-chance it actually improves the PPACA, that’s nice. On the flipside, here we are negotiating over basic things like funding the government and raising the debt ceiling, thus further normalizing this behavior. Ugh.
Yeah, lovely. This is what worries me.
I still want a clean CR and clean debt-ceiling increase.
…and hope beyond hope that our REPUBLICAN Senators and Representatives will find a way to do something they haven’t shown the ability to do in at least the last four years. Govern.
Fixed that for you.
Turns out Cruz met with a bunch of the Tea Baggers last night at a DC restaurant.
Does it make anyone else laugh that the racist, anti-immigration wing, met at a Mexican place??????
It is as if the Tea Party doesn’t believe in our system of government.
Actually, I believe the right wing radicals currently setting the national dialogue do not believe in our system of government, do not believe in the basic American ideals of the last 2 plus centuries, and harbor a deep rage of most things American. That is why watching them pretend to say the Pledge of Allegiance while spewing seditious speeches and waving symbols of treasonous rebellion makes me gag.
I don’t know if I’d go as far as Costa. They’re definitely deluded, reckless, and generally unpleasant.
I take back what I said about preferring funding for 6 or more months. I get it now:
Not that I’m hopeful, but that makes some sense.
My objection to leaving the debt ceiling weapon lying around remains.
@C. Clavin: You know, if every one of those idiots was out for the rest of the week with the trots, I’d consider that the greatest service to this nation a spiteful kitchen staff could perform.
Exactly. Anyone who takes the “Tea Party” mantle to themselves gives up the right to be treated like a rational adult ever again – they’re crying, tantrum-throwing children who can’t bear to live in a world where they don’t get their way on everything, all the time.
Ohhhh…imagine the conspiracy theories Jenos and his/her ilk would conjure up on that one…
The Tea Party caucus is liable to reject this deal because they know they will have diminished their standing so much with their October shenanigans that come Feb 7 or Jan 13, they will have an even weaker chip with which to bargain.
That said, the only reason to be leery of “kicking the can down the road” is the expected reaction from the right. We all sense that the Republicans are going to behave cynically and irresponsibly as the deadline approaches.
Maybe it will play better next year. But probably not.
Yep. It’s already being reported that the Teas in the House are rejecting this deal.
I got a downvote for PoopGHaziiiii!!!!????
@C. Clavin: I balanced it for you. As to your intital post, I imagine serving burritos is something the wingers think is an acceptable role for Mexican immigrants.
Now if one of the servers called out “Rafael” to a co-worker and Cruz said “yes?” that would be funny.
Charlie Dent (R-TX) outlines Boehner’s counter offer…
The Medical Device Tax…meh. Does anyone know what this is, dollar-wise?
The Re-Insurance Tax…a major win for the Unions.
Congress and WH Staff going to the exchanges…great idea…but as we all know this means you have to give them all raises to offset the employer provided funding and the Government subsidy (tax deduction). I have no problem with that…I would prefer the employer/employee insurance relationship was severed anyway.
Pylon….that would be funny….I can see an SNL skit developing here.
ISTR the numbers were $30B over 10 years on the device tax, CC.
Here’s another version of the House proposal, specifically the Vitter deal…
But that is nonsense…because it amounts to a huge cut in pay…
Both of which undermine the effectiveness of the law, even if it’s only a little bit.
Well … don’t tell the House Republicans, but I think this is pretty close to the clean CR.
It is a clean CR with window dressing, and importantly something for each side.
And while it might look like more of the same looming in a few months, I think the rules have changed.
I don’t know the $$ figures off the top of my head, but that tax is considered a mainstay of ACA – it’s one of the major things that’s supposed to, you know, help _pay_ for the whole process. Pull that out and you cripple the entire legislative concept _and_ jack up the deficit to cover the lost revenue. All those things the Republicans are supposed to be _against_.
Don’t Reid and Mcconnell look like the two old guys sitting in the balcony on the muppets show?
I can see that.
The insurers would definitely be concerned about the Re-Insurance Tax…which is a sort of safety net as I understand it.
Doug, Doug, Doug… don’t you realize by now that “kicking the can down the road” is the entire Democratic grand plan for dealing with problems? We can’t deal with them now, so we need to ignore it now and hope it’s easier to handle in the future.
@Jenos Idanian #13:
So much better to default and crash the economy and economic reputation of the United States, the “entire Tea Party grand plan.”
I worry that the Republicans know this, and the big question is whether they will actually take the suicide pledge, rather than suffer that indignity.
Which the GOP would then scream about. Remember, they’ve been claiming for some time now that the PPACA will actually cost more money than the CBO projected. So if they succeed (with or without Democrats helping them by “getting” something that compounds the problem) in ripping out some funding, this helps them make their case. Bad deal.
As for “can kicking” you know… the worst thing you can do is panic in a crisis. We had a major crisis in 2008-2009, and the aftermath is still with us. Revenue is lower than it should be, partly due to the poor economy and partly due to extension of most of the Bush tax cuts. Expenses are up because safety net programs helped catch a lot of people as they fell. Food stamps, etc.
This is not actually a good time to freak out. Keep Calm and Carry On. Yes, work on the long-term fiscal situation. We do need to. That’s fine. But this constant screaming fit is ginned up nonsense.
Debt as a % of GDP has been higher in the past. We do need to get ourselves onto a trajectory that reduces debt as a % of GDP over the next several decades. It will take time, sure. The run-up took time. The US government’s debt situation was arguably at its best in 1980 (hmm, then what happened?). One could also argue for 2000, given lower debt service costs (hmm, then what happened?).
Crazy, the House GOP’s own plan is a pile of nothing:
As we’ve noted, any reduction in the medical device tax is just “free money” and an expansion of debt. Fine for now, and can be corrected later.
The rest … is window dressing the window dressing.
We’ll be honored to go through this Republican-sponsored Debt Limit bulls*** again in short order.
Thank you morons.
The Republicans would indeed have to be morons to play it the same way again, after losing this badly.
They were shredded.
Don’t let your side get as sloppy as the other, in some frenzy that the least fig-leaf is “surrender” for your side.
@john personna: So much better to default and crash the economy and economic reputation of the United States, the “entire Tea Party grand plan.”
If our debt situation is so bad that even attempting to pay it down now will “crash the economy and (the) economic reputation of the United States,” how the frak will borrowing even more help?
Your economic philosophy boils down to the guy at the casino who keeps doubling his bets, convinced that he can eventually hit it and break even, while he signs for more and more and more chips.
@Jenos Idanian #13:
You really don’t understand macroeconomics at all. It’s not about making bets at a casino. And yes, an overnight cut in spending amounting to several percentage points of GDP would trigger a recession. There are knock-on effects, man.
Debt-to-GDP is what matters. We need good GDP growth (don’t have it yet) and we need that to outstrip nominal debt increase. When we do that, the debt shrinks compared to the economy. This is what happened throughout the 1950s, 60s and 70s. Until St. Ronaldus Maximus was elected and instituted voodoo economics. That caused debt as a function of GDP to rise again until ~1993, when the Democrats once again practiced fiscal responsibility and raised some more revenue. Then the Gingrich GOPers came in and got some spending cuts, further bettering the fiscal situation. Thus, debt to GDP was at a very nice level in 2000 (roughly 30%). Then Bush the Lesser came in and blew it all up, increasing it over 60% (via a combo of tax cutting and spending increases, include an incredibly stupid, expensive war). And then the financial panic of 2008 hit. That zoomed us over 80%. Now were at or near 100%, which is similar to the 1940s.
So yeah, we’ve got work to do. A lot of good work – done over the course of 4 decades – was undone and now we’ve got to pay for it. Funny,however, that when the subject of paying for things comes up, Republicans freak out.
@Jenos Idanian #13: The time to “pay it down” is when spending is committed to, i. e. during the legislative process, not when the bill comes due. We borrow more because we have to cover spending ALREADY COMMITTED TO BY CONGRESS.
But, unfortunately, we have this fundamentally stupid arrangement–unique among democratic nations–whereby the authority to commit to spending money is entirely divorced from the authority to borrow to cover the commitments.
And then the Republicans, who are every bit as responsible as the Democrats for committing to spending, put on a huge farce of pushing us toward default when it comes time to actually pay for what they’ve committed to.
And then they wonder why people get upset…
Actually, it’s not unique. Denmark (paging john personna) has a formal debt ceiling. And all members of the euro have committed to a debt ceiling of 60% of GDP under the Stability and Growth Pact.
That having been said, I’m in substantial agreement with you. I think the time to have the argument is appropriation time. That’s why I think that the Congress should adopt a rule that all appropriations bills must specify where the funds are to come from (not the general fund).
@Jenos Idanian #13:
Because the interest rate _now_ is at rock-bottom, you innumerate twerp. If we were to borrow heavily when the interest rate was 8%, rather than paying off the debts we ran up when times were tough, _that_ would crash the economy. This is _literally_ right out of any Econ 101 textbook.
@Jenos Idanian #13:
If you want to convince me of your forward economics, show me a chart, like this one from the CBO:
See that line?
It is all about how we bend it.
We are not at some wall.
This is not our “last chance.”
Thank you. Denmark has about 45% debt to GDP, compared to the US’s 75%.
They have the social services, they just pay for them.
What a concept.
@Dave Schuler: The Danes have a debt ceiling, but it’s so high they’ll likely never reach it. My understanding of the EU ceiling is that it’s more of a suggestion than a requirement, but I could be mistaken.
I was referring more to the divorce of spending authorization vs. borrowing to pay for it than the ceiling itself.
But when it comes down to it, even what we have, as silly as it is, had worked for nearly 100 years until the GOP decided to turn it into a problem.
They main thing about the Danes is that they don’t have these strange delusions about how tax revenue can never be above X% (the previous 10 year average) by some natural law.
They _decide_ their tax, and accept one which pays for the services they desire.
Hmm, seems my debt-to-GDP numbers (from my obviously fuzzy memory) were off. We’re actually in better shape than I thought.
Now it’s a fair point to note that interest rates being really low now is good but when they rise so will debt service costs. This is true, and is one reason we should looked to lower the debt-to-GDP ratio.
This is where I am at: I’m a fiscal conservative. But I also believe we should have a strong social safety net. Therefore, we should pay for it. That means taxes. The right wing radicals do not want to pay for anything but do not want to cut anything for themselves.
If we want to cut the deficit today, there really is only a couple of places to do that: cut the amount of social security checks today and reduce Medicare services and payments today. Not in the distant future.
The answer, of course, is increased revenues.
Or at least a significant part of the answer. If I were Emperor, I’d probably do a 50/50 split between increased revenues and spending cuts. Phased in over time, of course. Easy does it.
@Rob in CT: Agreed. I would support more phasing out of tax preferences for housing, healthcare, farm subsidies, tax shelters, etc.
@Jenos Idanian #13: “If our debt situation is so bad that even attempting to pay it down now will “crash the economy and (the) economic reputation of the United States,” how the frak will borrowing even more help?”
Refusing to pay bills that are due is hardly “attempting to pay it down.” I know you exist on line just to annoy people, but really, it is physically impossible for anyone to be as stupid as you are now pretending to be.
Oh hell yes. That’s definitely part of my dream tax reform. The sad part is that those elements (which are really heavy lifts) are probably the most likely to happen parts of my dream reform. The bit about an inheritance tax with actual teeth… ah, a boy can dream.