(This post updated at 1:45 p.m. EDT)
With just two days to go before the nation potentially defaults on its debts, the push to reach a deal took on new urgency on Capitol Hill. There was a flurry of activity Tuesday — a potential deal eagerly awaited by the White House seemed to be coalescing in the Senate, and House Republicans skeptical of a potential Senate plan were struggling to come up with a proposal of their own.
Bottom line is that so far, there is no firm deal in either chamber. Here's where things stand:
House GOP Leaders Float Plan
House Speaker John Boehner said at a news conference that Republican leaders were "trying to find a way forward" in the partisan impasse. He hinted at a possible plan to counter an emerging bipartisan Senate deal to end the shutdown and temporarily extend the debt limit. But Boehner was short on specifics, saying that there had been "no decisions about what exactly we will do" and acknowledging "a lot of opinions" among his colleagues.
The lack of clarity contrasted with reports Tuesday morning of a House proposal that called for a two-year delay of a tax on medical devices tied to the Affordable Care Act and would reopen the federal government. And it wasn't clear whether the speaker could muster the votes to get such a plan out of his chamber, let alone past the Democratic-controlled Senate or signed by the president.
Any House GOP plan could throw a monkey wrench into the partisan political mix and thwart a deal before Thursday, when a debt ceiling deadline expires and the federal government will no longer be able to borrow money and will have to pay bills with only the cash it has on hand each day.
House Minority Leader Nancy Pelosi decried the "Republican act of sabotage" that was "a luxury our country cannot afford."
The New York Times reports that the "apparent disarray left Mr. Boehner with a crucial decision to make as time ticked down toward a possible default on government obligations on Thursday. Does he accept whatever bipartisan plan emerges from the Senate, most likely on Tuesday, or does he continue to try to get House Republicans in line behind a counterproposal that, as of yet, does not exist?"
House Democratic leaders were expected to meet with President Obama later this afternoon to discuss their options.
Senate Close To A Deal?
Senators were watching closely to see what the House would do. As Politico writes:
"Fast-paced Senate talks to reopen the government and avert a default came to a temporary halt Tuesday as Senate Minority Leader Mitch McConnell waited to see whether House Republicans could pass their latest proposal."
The Senate proposal, while not yet final, reportedly would fund the government through Jan. 15 and suspend the debt ceiling until Feb. 7. It would include only limited changes to the Affordable Care Act and was thought to represent a compromise that Obama and congressional Democrats would accept.
USA Today describes the plan as "approving a stopgap funding bill to reopen government through Jan. 15; suspend the debt ceiling until Feb. 7; and create the framework for formal budget negotiations to conclude by Dec. 15 with long-term recommendations for funding levels and deficit reduction."
In exchange, The Washington Post says, "policymakers would launch a new round of talks over broader budget issues in hopes of developing a plan to replace deep automatic spending cuts known as the sequester before Jan. 15 ... [and minor] safeguards to ensure that people who receive federal subsidies to purchase health insurance under the law are eligible to receive them."
Speaking to reporters on Tuesday, White House Press Secretary Jay Carney said, "The president is pleased with the progress that has been made in the Senate."
"There is a potential for a resolution to this manufactured crisis," he said, adding that the impending debt ceiling deadline had provided some clarity for lawmakers.
But as NPR's Liz Halloran notes:
"Even if Senate Democratic Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell come up with a deal, passage is far from a sure thing in the fractious, GOP-controlled House. Jonathan Strong, writing in the National Review, says that 'even a deal cut by Senate Republican leader Mitch McConnell is no fait accompli in the House. ...' And Strong brings up the tricky timing of the whole endeavor, suggesting that even if the Senate begins work on today on a debt ceiling bill, it could take until Saturday to get passed. 'In that time,' he says, during which Thursday's debt-ceiling deadline hits, '[GOP House Speaker John] Boehner could go on offense.' "
What Happens If Debt Ceiling Is Reached?
As we wrote last week, Treasury Secretary Jacob Lew has made dire predictions in the event that Congress fails to raise the limit by Thursday.
"It could deeply damage financial markets, the ongoing economic recovery, and the jobs and savings of millions of Americans," he said.
"No Congress in 224 years of American history has allowed our country to default, and it's my sincere hope that this Congress will not be the first," Lew said.
However, as The Wall Street Journal reports, the exact date of the default isn't so cut and dried as is being made out.
"The Treasury Department says Congress must extend the government's authority to borrow money by Oct. 17, or place 'our economy in a dangerous position.' Some Republicans, fighting the administration on several fronts during the current shutdown, have ringed another date for disaster. They say any default on government debt might not happen until Nov. 1 — and even then, a catastrophe won't necessarily occur.
"It is easy to paint this as just another political skirmish. But there are legitimate reasons to quibble over the date of calamity. Treasury has cited the time easiest to pinpoint: when the government is no longer able to borrow. But that is very different from running out of cash entirely. And that date remains elusive."
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