Reports: Senate Deal to End Shutdown, Raise Debt Limit Taking Shape

Posted: Oct 14, 2013 4:15 PM

Having given Susan Collins a cold back-of-the-hand over the weekend, Harry Reid has reportedly co-opted some of her proposed compromise and has presented it to Mitch McConnell and Senate Republicans. A planned 3 pm ET photo-op "meeting" at the White House was abruptly postponed, sending the chattering class into a tizzy. If that inevitably useless meeting has been shelved, might that suggest that actual meaningful progress is taking place? Maybe. What might the general outline of the plan look like? There are a number of conflicting reports flying around, so let's try to get a handle on them. Politico:

Senate leaders are closing in on a deal to reopen the government and extend the U.S. debt ceiling until next year, marking a major breakthrough in an impasse that has paralyzed Washington for the last two weeks, according to several sources familiar with the talks. In a furious round of last-ditch negotiations, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell were discussing a proposal to reopen the government until Jan. 15 and raise the national debt limit until Feb. 15. Several people familiar with the matter expected that a deal could be announced Monday, though its prospects in the GOP-led House are far from certain.

Hey, the temporary truce might even last through the holidays. The point about the House is a major wild card -- but first, more details:

The plan under consideration would require larger bicameral budget negotiations to conclude by Dec. 15, sources said. Moreover, Senate Democrats are open to a requirement that those receiving Obamacare subsidies be subject to income verification. But it appears that the fight over delaying Obamacare’s medical device tax is still a point of contention with Democrats objecting to its inclusion in the package, sources said. If sequestration were to continue in 2014, the proposal would give federal agencies more discretion to implement the across-the-board cuts. Under the plan, the government would be funded at $986 billion until Jan. 15, the same day that a $21 billion across-the-board sequestration cut is slated to take place. Indeed, by aligning the government funding fight with the date that the next sequester is supposed to hit, it all but ensures a heated fight over whether to continue the unpopular cuts in the new year. Doing so would lower 2014 funding levels to $967 billion, a level far too low for many Democrats. And by extending the debt ceiling until the beginning of next year, it would put the issue in the center of the heated 2014 midterm elections.

In layman's terms, the partial federal shutdown ends, with the government getting funded at sequestration spending levels, as required by the 2011 Budget Control Act. The government's borrowing authority would be extended for four months. In the meantime, larger-scale budget negotiations involving both houses of Congress and the White House would ensue. Democrats' goal would be to undo the sequester -- the proposal currently being discussed may offer some added flexibility for agencies to ameliorate some of the more biting impacts of the president's clumsy cuts -- while Republicans would ask likely for tax and entitlement reforms. In the meantime, Republicans would back away from their "defund or delay" Obamacare demands (more on that shortly), while Democratic "concessions" would include (a) possibly repealing or delaying Obamacare's job-killing medical device tax, (b) requiring Obamacare subsidy recipients to prove they're eligible, and (c) funding the government at the Republican-preferred dollar amount through mid-January. All three of these supposed "accommodations" rate between flimsy and phony. On the medical device tax, 79 Senators have already voted to repeal it. And this deal might only delay it. As for the subsidy verification mechanism, that's already a provision within Obamacare. Yes, the president unilaterally waived it for a year, but it's still the letter of the law. So Democrats would be offering to...follow the law. How generous. Sarcasm aside, though, this could be a relatively big deal. Phil Klein and others have been pressing the GOP to really fight on this front; winning on this issue would cut down on Obamacare fraud, and would likely amount to a de facto delay of any subsidies being distributed in the near-term due to of the law's epic tech flop. If this part of the bargain has teeth, it's significant. But does it? We'll soon find out. Finally, on the federal spending levels, Democrats are again "agreeing to" current law. The Budget Control Act was signed by the president, and its resulting sequester cuts were Obama's idea. Democrats want to spend more, of course, but it's still not a "concession" to abide by the law.

This deal, as it's being reported, stinks. But it's probably about as good as the GOP is going to realistically get. People can call that a surrender-monkey defeatist attitude, but with this guy running the Senate, and this guy in the White House, Republicans' hands are tied. They've pressed the issue admirably -- some might even argue too far -- and may emerge with a few paper-thin, fig-leaf victories. Democrats have finally negotiated, after claiming that they would not, and after tripping themselves up on a few occasions. Why the about-face? First, the deadline is getting awfully close. Second, although the GOP continues to take the biggest beating over the shutdown, the latest WaPo/ABC poll clearly shows that nobody in DC is helping themselves as the mess drags on:

Republicans should seriously consider improving the offer to whatever extent is possible, then accepting it. End the shutdown, stave off technical default, and pivot the entire GOP messaging strategy to addressing the slow-motion trainwreck that is the Obamacare launch. To attain goals beyond mere policy scraps at the federal level, Republicans need to win elections. It's political malpractice to allow these budget crises to continue to detract from the "excruciatingly embarrassing" "disaster" Democrats have created for themselves with Obamacare. Take an imperfect deal, then bombard vulnerable Democrats like this:

- That fig leaf is getting awfully small. Repeal/delay of the medical device tax has been punted to next time. Wonderful. Paul Ryan is going to try to push this as a "win," but it's more of a not-loss. Meanwhile, here's what I've been hearing from a rank-and-file House GOP member I spoke with minutes ago:

UPDATE II - It looks like we won't know much until tomorrow, and the deal's viability is anything but certain.

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