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U.S. government shuts down

The U.S. government shutdown Oct. 1 for the first time in 17 years. The shutdown was blamed on a Congressional stalemate.

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WASHINGTON — Negotiators have reached a bipartisan deal on a new federal budget plan that would set spending levels and eliminate arbitrary forced spending cuts scheduled to hit early next year, multiple sources said on Tuesday.

Both the House and Senate must still vote on the agreement that also is seen as important for averting a government shutdown like the one in October caused by the inability of Congress to agree on spending for the current fiscal year.

Opponents in both parties immediately raised concerns about the agreement, which, if passed by Congress, would mark a significant departure from repeated congressional showdowns over the budget in recent years.

congressEarlier, House Budget Committee Chairman Rep.Paul Ryan told reporters that “we’re making really good progress, we’re getting close.”

Ryan and Democratic Senator Patty Murray have spent the past two months working on an agreement that would set government spending levels and replace the next round of deep automatic cuts — known as sequester — set to take effect early next year.

Negotiators were tasked with reaching a deal following October’s budget drama in Washington, when inaction by Congress on spending for the current fiscal year led to a 16-day federal shutdown.

Congress passed temporary spending authority after the shutdown that expires in mid-January. With the Republican-led House leaving town on Friday for the holidays, negotiators worked for a deal this week to give Congress its best shot at weighing a spending proposal when it returns in early January to avoid another fiscal debacle as the new year gets underway.

Ryan cited progress, but there were signs of pushback from the right and left over pension contributions and unemployment compensation.

On the Democratic side, two key House leaders — Rep. Chris Van Hollen and Rep. Steny Hoyer — have strongly objected to the idea of including an increase in federal worker pension contributions as part of the deal.

Both men represent Maryland districts heavily populated by federal employees.

Democratic pushback may have gained them some ground.

“The proposal that’s before us – it’s a little bit better than it was yesterday. We made progress. But it hasn’t fully satisfied us yet,” said Democratic Rep. Steve Israel of New York.

Democrats also are pushing for an extension of unemployment benefits to be in the deal, and Murray put it on the table in the budget negotiations.

On Tuesday, the No. 2 Democrat in the Senate, Dick Durbin of Illinois, indicated the politically charged issue may be separated from budget talks.

“From my understanding, that’s more between Speaker (John) Boehner and (President Barack Obama) at this point,” Durbin told CNN.

While they insist jobless benefits be addressed before Congress adjourns, multiple House Democrats suggested any extension could be attached to other must-pass measures — like a farm bill extension or legislation covering Medicare reimbursements for doctors.

Israel, however, said fellow Democrats are not ready to concede that an unemployment extension “won’t be part of the budget.”

On the right, conservatives are pushing back at any change in the spending caps that were put in place in the 2011 budget law that set in motion the sequester cuts.

Three conservative organizations–Americans for Prosperity, Heritage Action and Freedomworks– issued statements Tuesday urging conservatives to oppose any deal that would roll back the caps or set higher spending levels.

The political objections create a significant issue in the House, where any deal would likely need a coalition of Republicans and Democrats to pass.

SEATTLE — Congress barely avoided a debt default at the 11th hour earlier this month, but many worry that the country will relive that same turmoil when the next fiscal deadlines hit early next year.

The recent deal specifically calls for the heads of the Senate and House budget committees, Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., to hammer out a compromise spending plan by mid-December, right before the country faces yet another possible shutdown and default.

Patty Murray, Female Senators Hold News Conf. On Planned Parenthood AmendmentThat’s exactly what Congress has been unable to do for several years now.  But this time is different, according to Murray, with the chances of success much better.

First, she argues, Republicans will be more willing to negotiate now since they suffered so much in the polls from the 16-day government shutdown. And, second, she said, is because both parties, but Republicans especially, will want to avoid the next round of harsh sequestration cuts, which start in January.

“The vast majority of the next sequestration cuts come from defense,” Murray said.  “I do believe the Republicans this time are much more willing to come to the table to find a replacement for that.”

But so far, at least, Republicans aren’t budging on their strong support of the automatic sequestration cuts, which they argue have been the only way to control spending.

“Washington actually can cut spending,” said Senate Republican leader Mitch McConnell of Kentucky. “Because of this law, that’s just what we’ve done. For the first time since the Korean War, government spending has declined for two years.”

Perhaps the next showdown can be avoided if Murray and Ryan can find some kind of personal connection and level of trust.

“He’s actually a very personable guy,” Murray said.  “He and I have met numerous times in a lot of different ways.”

Murray said they both recognize the importance of their positions as the chairs of their respective budget committees.

“We knew at the end of the day we were going to be in this position at some point, where we had to work something out together,” Murray said.

Local News

Sen. Murray: ‘We must show country that we can work together’


SEATTLE — Sen. Patty Murray, D-Wash., in her first trip back to Washington state since the end of the government shutdown, told an audience in Mukilteo, “My God, it’s great to be home.”

Murray was there to celebrate the landmark transfer of the 20-acre former tank farm from the Air Force to the Port of Everett, something she has been working on for years.

patty-murray2The transfer of property is an effort to help revitalize the waterfront and also create space for a new Mukilteo Ferry Terminal.

Murray also spoke to reporters about the newly created, special conference committee she is chairing with Rep. Paul Ryan, R-Wis., in the wake of the compromise this week that ended the government shutdown.

She said she is confident she can come up with a workable budget with her Republican counterpart by their self-imposed Dec. 13 deadline to avoid another shutdown in mid-January.

She said each of their proposed budgets protect Social Security, favor tax reform and make spending cuts, although the House version calls for $4 trillion in cuts and the Senate version trims $1 trillion.

“I believe Congressman Ryan and I have a responsibility to not only find a way to solve the fiscal problems of our country, but to really show the country that we can work together,” Murray said.

She also said the country needs to heal from the pain inflicted by the 16-day shutdown this month.

“The country is still bruised from the small group of people in D.C. who wanted ‘my way or the highway’,” she said.

Local News

Sen. Murray: ‘Country is still bruised’

patty murray2SEATTLE — Sen. Patty Murray (D-Wash.), in her first trip back to Washington state since the end of the government shutdown, told an audience in Mukilteo, “My God, it’s great to be home.”

Murray was there to celebrate the landmark transfer of the 20-acre former tank farm from the Air Force to the Port of Everett, something she has been working on for years.

The transfer of property is an effort to help revitalize the waterfront and also create space for a new Mukilteo Ferry Terminal.

Murray also spoke to reporters about the new committee she is chairing with Rep. Paul Ryan (R-Wisc.), in the wake of the compromise this week that ended the government shutdown.

She said she is confident she can come up with a workable budget with her Republican counterpart by the Dec. 13 deadline. She also  said the country needs to heal from the pain inflicted by the shutdown.

“The country is still bruised from the small group of people in D.C. who wanted ‘My way or the highway’,” she said.

Local News

Commercial Alaska crabbing permits to be issued Friday

opilio-crab-fishing-season-1[1]WASHINGTON — With the government shutdown over, the National Oceanic and Atmospheric Administration is opening the Bristol Bay Red King Crab Fishery to Washington state and Alaska crab fishermen, it was announced Thursday.

NOAA will issue quota permits for each crab vessel and fishing should begin this weekend, Sens. Maria Cantwell, D-Wash., and Mark Begich, D-Alaska, said in a news release.

Located in Alaska’s Bristol Bay region, the fishery was set to open Tuesday, Oct. 15, and lasts until Jan. 15. But because of the government shutdown, and with federal workers furloughed, NOAA could not issue permits that authorize American crews to fish for Alaskan red king crab. The Bristol Bay Red King Crab Fishery has 80 boats employing 500 fishermen; about 50 of those boats are based in Seattle.

“This is great news for Pacific Northwest fishing jobs,” Cantwell said. “Last week on Capitol Hill, (‘Deadliest Catch’ reality show’s) Captain Keith Colburn clearly showed the damage that the unnecessary government shutdown could cause to family fishing businesses.”

“I’m pleased federal agencies are getting back to work to ensure the Bristol Bay Red King Crab Fishery can open as soon as possible,” Begich said. “Expediting permits is a priority so that Alaskan fishermen can get to work. Consumers are eager to get Alaska king crab, some of the best seafood on earth, and Alaska fishermen want to fulfill this demand, earn a living wage for their families and keep the Alaska economy strong.”

In a letter to Commerce Secretary Penny Pritzker, the senators said that each fishing vessel loses $1,000 every day the fishery remains closed. NOAA is a part of the Commerce Department.

Washington (CNN) — The morning that the federal government reopened after 16 days of political stalemate, President Barack Obama stood at the podium in the State Dining Room of The White House. He didn’t smile.

“Those of us who have the privilege to serve this country have an obligation to do our job as best we can. We come from different parties, but we are Americans first,” he said.

He then chastised Republican lawmakers, blaming them for the shutdown and drama over the debt ceiling that he called “completely unnecessary” and said damaged “our economy.”

Fresh from what most are calling an undisputed political victory over the conservatives, the President didn’t seem in a conciliatory mood.

His body language said it all: Enough already.

A long history, a strained relationship

Obama has more than three years left in his presidency and the next battle is just months away because the deal approved by Congress that he signed only funds the government through early January and only extends U.S. borrowing authority until early February.

From his bully pulpit on Thursday, Obama invoked his professorial tone and implored Congress that their working relationship “has to change.”

“Because we’ve all got a lot of work to do on behalf of the American people and that includes the hard work of regaining their trust,” Obama said.

This episode was only the latest in a series of confrontations between the President and Congress. To say that his relationship with the legislative branch has been strained might be the political understatement of the decade.

A deal for now, but this year’s been a legislative dud for Obama

The biggest battle was over Obamacare, which passed the Democratic-controlled Congress in 2010. But the past year alone has seen fierce wrangling over the administration’s response to the deadly terror attack in September 2012 on the U.S. diplomatic mission in Benghazi, Libya.

And there was the major fiscal cliff impasse over budget cuts and tax increases last March and in the first excruciating battle over spending and the debt limit in the summer of 2011.

There has also been tension over Syria and Iran.

‘Bottom of the barrel’

While he said “there are no winners,” Obama used the moment to press his agenda. He urged Congress to determine the government’s spending and priorities for 2014 and beyond.

He also urged lawmakers to pass an overdue farm bill that sets the country’s farming priorities and pays for food assistance.

He wants the House to take up the immigration reform bill, which the Senate passed earlier this year, and has called for a return to “regular order,” where Congress approves budgets, reconciles differences and gets things done.

“The American people are completely fed up with Washington,” he said, reflecting polls that show support for Congress at historic lows.

It’s an ambitious agenda, especially for a government fresh off a debilitating few weeks and tensions between the two branches are high and trust is low.

One former Democratic member of Congress, Dan Glickman, who represented Kansas for 18 years and currently sits on the political reform commission at the Bipartisan Policy Center, said that the shutdown showdown brought about one bright spot.

“I think we may have reached the bottom of the barrel,” meaning things in Washington “can’t get any lower than this,” he said.

In defeat, Boehner may live to fight another day

But former House Speaker Newt Gingrich disagreed. He said the most conservative members who wanted to gut Obamacare in exchange for government funding got little out of the budget deal are even more incensed.

“They will be more embittered, more angry. They will find more ways to go after Obama because they can’t find any way to get him to negotiate,” he said.

Gingrich’s statement rings true if Rep. Raul Labrador, R-Idaho, accurately represents his like-minded colleagues. He told the Huffington Post that he thinks immigration reform is dead.

“For us to go to a negotiation, to the negotiating table with President Obama after what he has done over the last two and a half weeks, I think would be probably a very big mistake,” Labrador said.

House Minority Leader Nancy Pelosi didn’t mince words Thursday morning. She said the Republicans’ “temper tantrum” cost the economy $24 billion.

‘That’s democracy’

From his lectern, Obama tried to sound like the adult in the room.

“Democrats and Republicans are far apart on a lot of issues and I recognize there are folks on the other side who think that my policies are misguided,” he said. “That’s putting it mildly. That’s okay. That’s democracy. That’s how it work.”

While he offered out his hand for future negotiations, Obama didn’t stay completely above the fray. In the same sentence he blamed one faction of the Republican Party for the latest dysfunction, insisting that their goal is to cause chaos.

“Let’s work together to make government work better instead of treating it like an enemy or purposely making it work worse,” Obama said.

Why is Ted Cruz smiling?

Understanding that he needs the Republican Party to get anything done in Washington, he separated the party into two factions and implored the more rebellious to stay in line.

“You don’t like a particular policy or a particular president? Then argue for your position. Go out there and win an election. Push to change it but don’t break it. Don’t break what our predecessors spent over two centuries building. That’s not being faithful to what this country is about,” he said.

While Obama tried to highlight the rifts in the Republican Party, perhaps hoping to exploit the divisions and then conquer, Republicans appeared united, at least for a few hours Wednesday night.

Moments before the House was set to vote on a deal to reopen the government, House Speaker John Boehner received a standing ovation, even from his most vocal Republican critics.

And one of those critics, Rep. Justin Amash, R-Michigan, said Boehner’s leadership through the latest battle has been “fantastic.”

Then Sen. John McCain, R-Arizona, put a damper on that party.

“This was a terrible idea. I told you at the beginning how it was going to end. We know if they try it again how it’s going to end. So hopefully, they won’t try to do this again, at least not in my lifetime,” McCain said.

obama boehner


This just in: Congress votes to do its job

NEW YORK (CNNMONEY) — The deal Congress passed to avert default and fun the government for a few months also requires lawmakers to do what they, um, were elected to do: Sit down and negotiate over a budget.

What those negotiations can accomplish was not at all clear on Thursday.

Expectations for any large, long-range deal are low. And experts are not wildly optimistic lawmakers will successfully deal with shorter-term budget decisions either.

“Because the deal does not address any of the underlying policy differences between the two parties, Washington will simply barrel toward a new set of deadlines no better prepared for compromise than it was this time around,” said Sean West, U.S. policy director for the Eurasia Group.

Watch the CNN video here. 

Related: Who owns U.S. debt?

The deal doesn’t require anything specific of budget negotiators other than to wrap up talks by December 13, and to not use the talks as a vehicle for further debt ceiling increases.

The most immediate decision: What to do about the across-the-board spending cuts known as the sequester, and how to fund the government for the rest of fiscal year 2014? The deal only provides funding through mid-January.

If lawmakers don’t renegotiate the sequester, which is widely acknowledged to be a ham-fisted way to reduce deficits, funding will automatically be cut by an additional $19 billion on January 15 on top of the cuts already made this year.

Of course, lawmakers haven’t been able to agree how to replace the sequester since it was first created as a cudgel in 2011.

Republicans want to lessen the cuts for defense and instead cut non-defense programs more deeply — a nonstarter for Democrats.

Democrats want higher 2014 funding levels than called for under sequestration and want to replace them with longer term budget savings from spending cuts and tax increases — a nonstarter for Republicans.

These disagreements bleed into general discussions about funding the government for 2014. If Congress fails to do so by January 15, another government shutdown will occur.

More broadly, people in both parties acknowledge that tax reform and entitlement reform will help close the country’s long-term shortfalls and help boost the economy over time. They just disagree vehemently about how to go about it.

And here’s the thing: 2014 is a midterm election year for Congress. The voting public never loves hearing that benefits may be cut and taxes increased. Nor is it clear that hardliners in either party are in a negotiating mood.

Still, there’s a chance something longer term comes out of the budget conference, which will be headed by Republican Paul Ryan of the House and Democrat Patty Murray of the Senate.

“I hold out some hope that a combination of tax reform and minor entitlement reforms can emerge. I have much more optimism now that it is in the hands of Ryan and Murray,” said Steve Bell, senior director of the Bipartisan Policy Center’s Economic Policy Project.

His colleague, William Hoagland, is also hopeful but not quite as optimistic. Maybe the committee will net some minor deficit reduction, said Hoagland, a senior vice president at the center. But he’s not holding his breath. “You can lead a horse to water but you cannot make him drink.”

Longtime budget expert Stan Collender, a former Democratic staffer in Congress, is not hopeful at all. “They haven’t done anything in two years. Why does anyone think anything can happen in a few months?”

As for the lead negotiators? Put them down as officially hopeful.

“We recognize … the challenges we face in reaching an agreement. But we want to find common ground and work toward a bipartisan deal. We intend to focus on what we can achieve,” Ryan and Murray said in a joint statement after the deal passed the House.

The two met for breakfast on Thursday.


SEATTLE — The Ballard Locks have been hit hard by the 16-day government shutdown, but things are slowly returning to normal.

The Carl S. English Jr. Botanical Garden at the Locks has reopened and park rangers are back and getting the place up and running again. The garden was open shortly before 7 a.m. Thursday; Army Corps of Engineers rangers said they received word to head back to work Wednesday afternoon.

They have plenty of work ahead of them. During the shutdown, no one was around to keep up the landscaping and they said it will take a few days to get everything in order, especially at the botanical garden.

locks“I walk over here and get a cup of coffee and my morning paper and a little exercise, so I am glad that it’s back open. It’s about time,” Bob Robillard, a Ballard resident, said.

For many in the area the shutdown was frustrating.

“I think it was a little nutty,” Karim Miller said. “Basically I wouldn’t say they got what they deserved, but you know it wasn’t right what they did. They should have been able to agree, work it out, but not let people sit idle,” Miller said.

Gov. Inslee released a statement Thursday morning saying, “Beginning today, federal offices will reopen and federal employees and federally-funded state employees will return to work. Washington state escaped the most severe impacts that would have soon hit had Congress not acted, though the past two weeks have brought needless stress to many families here.”

NEW YORK (CNNMoney) — The United States may have dodged an economic catastrophe by raising the debt ceiling and opening the government, but it didn’t emerge from the political debacle unscathed.

WHITEHOUSEMONEYThe 16-day government shutdown took a $24 billion chunk out of the U.S. economy, according to an initial analysis from Standard & Poor’s.

As a result, the rating agency projects that the U.S. economy will grow by an annual pace of around 2.4% in the fourth quarter — as opposed to the roughly 3% growth rate predicted prior to the shutdown.

“Given the size of the economy, it’s small. But because it’s happening all at once, so quick, so fast, unplanned; it’s going to hurt,” said Beth Ann Bovino, U.S. chief economist at S&P. “We can absorb it, but it still hurts.”

Hundreds of thousands of federal workers were furloughed during the shutdown, but that was just one of the widespread effects of the first shutdown in nearly two decades.

Federal contractors also furloughed thousands of employees. Small businesses reeled from frozen government contracts and stalled business loans. Closed national parks hit the tourism industry, while military families saw child care and other services shuttered.

Consumers, also scared by the debate over raising the debt ceiling, started to cut back.

While federal workers will ultimately receive back pay under the deal, contractors will likely not get their lost wages, Bovino said. And with the deal only guaranteeing government funding through Jan. 15, many federal workers and contractors may continue to hold back on spending into the holiday shopping season.

“That’s going to keep people a little more cautious, particularly government workers and certainly contractors,” she said “It certainly suggests a ho-hum holiday.”

The debt fix is also only temporary, which could continue to fuel economic uncertainty, hurting consumer confidence and slowing hiring, said Mark Zandi, chief economist for Moody’s Analytics.

Zandi blamed continued government brinksmanship as a major factor holding back the U.S. economic recovery.

“This is a real corrosion on the economy,” Zandi said. “If we have to go down a similar road in the near future, the costs are going to continue to add up.”