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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 (CNN) — After a day of false starts, the Republican leaders of the House canceled plans for a Tuesday night vote on ending the U.S. budget standoff.

“No votes tonight. We’ll see you in the morning,” House Majority Leader Eric Cantor said as he left the Capitol.

The decision, made amid widespread dissension in GOP ranks, sends the partial shutdown of the federal government to a 16th day and brings the United States a day closer to a threatened default. Cantor, R-Virginia, did not answer questions about what may come next.

The Treasury Department says it will hit its borrowing limit on Thursday — and economists warn that failure to raise the that limit by then could spike interest rates with possible catastrophic impact at home and abroad. With the Republican leadership apparently unable to come up with any plan acceptable to its members, the Wall Street bond-rating firm Fitch warned of a possible downgrade of gold-plated U.S. bonds, citing the risk of default from “political brinkmanship.”

House Republicans first proposed their own version of a Senate plan to temporarily end the political stalemate paralyzing Congress, then haggled among themselves over the details throughout the afternoon. But shortly after announcing the planned vote, the House committee that sets the rules for such procedures postponed its hearing, putting in doubt the possibility that the full chamber would consider the measure on Tuesday night.

Rep. Joe Barton, R-Texas, told CNN’s The Situation Room that the delay indicated House Speaker John Boehner didn’t have the votes to get the proposal through the House. Barton added that he would have voted against the measure anyway.

“There no structural reform. There’s no cost savings,” he said. “It’s just, kick the can down the road another six weeks or two months.”

President Barack Obama called for House Republicans to “do what’s right” by reopening government and ensuring the United States can pay its bills, telling CNN affiliate WABC that “we don’t have a lot of time” to avoid a possible default.

Any House proposal would have to go to the Democratic-led Senate for consideration, with pressure mounting for a final agreement before financial markets react to the possibility of a first-ever U.S. default.

According to multiple sources, the House plan called for funding the government through December 15 to end the partial shutdown that entered its third week. It also would increase the federal debt ceiling until February 7.

In addition, the House GOP version would include a provision demanded by tea party conservatives that would prohibit federal subsidies for the President, officials in his administration, members of Congress and their respective staff in buying health insurance under Obama’s signature health care reforms.

Republicans dropped demands to include two other provisions related to Obamacare. One would have delayed a tax on medical devices proponents say is needed to help pay for the Affordable Care Act and the other would have tightened income verification of those seeking subsidies to purchase health insurance.

The House proposal also would forbid the Treasury from taking what it calls extraordinary measures to prevent the government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

Earlier, sources said Boehner was “struggling” to come up with enough votes to pass the GOP counterproposal to the Senate plan. After a two-hour caucus meeting that lasted far longer than scheduled, Boehner told reporters there was no final decision on what the GOP-led House would do.

In a possible signal that he would proceed on a plan opposed by the GOP tea party conservative wing, Boehner said “the idea of default is wrong and we shouldn’t get anywhere close to it.”

Hours later, GOP sources confirmed that the revised Republican plan would be put to a vote.

House Democrats criticized the plan as a reckless attempt to torpedo any chance at compromise.

Minority Leader Nancy Pelosi, following a meeting between Obama and House Democratic leaders, signaled her caucus still wanted “clean” proposals to fund the government and raise the debt ceiling.

“The bill that they’re talking about right now is a bill to default. It’s a decision to default. Once they get over that, then we’ll see what they send to the floor,” she said of Republicans, adding that she remained optimistic Congress would find a path to resolve the matter.

Two senior House GOP sources told CNN’s Deirdre Walsh that the House GOP counterproposal would have been passed in a way that allows the Democratic-led Senate to strip provisions with a simple majority. Walsh and CNN Chief Congressional Correspondent Dana Bash explained that would make it harder for tea party conservatives such as GOP Sen. Ted Cruz of Texas to delay or derail the agreement.

The significance of having the House go first became clear later Tuesday, when sources in both parties told CNN that senators working on the agreement put their work on hold temporarily as Reid and McConnell waited to see how the House proceeded.

Senate Majority Leader Harry Reid and other Democrats immediately slammed the House GOP leadership for what they called a reckless brinkmanship maneuver.

“Extremist Republicans in the House of Representatives are attempting to torpedo the Senate’s bipartisan progress with a bill that can’t pass the Senate,” Reid said on the Senate floor.

He earlier said he was “confident we will be able to reach a comprehensive agreement this week,” reiterating the optimism he expressed Monday night that raised hopes among investors, world leaders and regular Americans that the shutdown stalemate was nearing an end.

The White House also rejected the Republican effort.

WASHINGTON (CNN) –Joe Biden on Capitol Hill to Negotiate Fiscal Cliff

Courtesy Jim Lo Scalzo/EPA/LA Times
Local News
10/15/13

Shutdown: Everything from home sales to crab fishing threatened

opilio-crab-fishing-season-1[1]

SEATTLE — The impact of the continuing government shutdown in Washington D.C., is now being felt by Seattle King Crab fishermen stuck in Alaska.

The season has technically started, but none of the fleet can head onto the Bering Sea to fish because federal workers who issue permits are on furlough. So fishermen are forced to sit and wait.

Meanwhile, some prospective home buyers are also in a holding pattern. They need a certified, IRS copy of tax returns to get a loan approved and they can’t get those until the IRS’s offices re-open.

WASHINGTON —  House Republicans, moving to get ahead of a developing bipartisan proposal in the Senate, plan to move their own measure Tuesday to end the standoff over the federal budget.

The House plan would include stronger measures targeting President Obama’s healthcare law, but still represents a major scaling back of GOP demands and may draw opposition from the most conservative Republicans in the chamber.

House Speaker John A. Boehner was to outline the plan in a meeting of the Republican majority Tuesday morning.

The proposal would accept key parameters of the emerging Senate deal – reopening the federal government by extending current spending levels through mid-January, and raising the nation’s debt limit through February.

WHITEHOUSEMONEYBut the House plan would add tweaks to the Affordable Care Act. Rather than delay a new tax opposed by labor unions, as the Senate plan would do, the House would delay for some time a tax on medical devices that the law imposes on manufacturers.

Like the Senate plan, the House would add an income verification requirement for customers who buy insurance through the new online marketplaces set up by the health law.

It would also seek to end the government’s payment of its traditional employer’s share of health-insurance premiums for members of Congress and administration officials, who are now required to purchase medical insurance through new exchanges. Democrats have previously rejected that idea, which is popular among Republican activists.

For more on this LA Times story, click here.

By Lisa Mascaro, Michael A. Memoli and Brian Bennett

Los Angeles Times

WASHINGTON — Swift-moving negotiations Monday in the Senate led to an outline of a budget deal as leaders moved to prevent a potentially catastrophic debt default and end the damage done by the two-week government shutdown that has dismayed Americans over Washington’s brinkmanship.

reid mcconnellDetails remained in flux on the emerging agreement, but Senate aides said it would give the government authority to borrow to pay its bills  into February and would reopen government agencies until Jan. 15.

In the meantime, the Senate and House would create a budget conference committee to negotiate an overarching agreement with the aim of allowing Congress to pass its regular bills to fund the government.

The proposal would not make significant changes in President Obama’s health care law or other government policies. It seems likely, however, to include a couple of relatively small tweaks to the law, including delay of a new tax opposed by labor unions.

Activity swirled around the offices of Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., with intense talks under way and just three days to go before Thursday’s deadline to raise the nation’s $16.7-trillion borrowing capacity to continue paying its bills.

“We’ve made tremendous progress,” Reid said as he closed the Senate in the evening, counseling patience. “Perhaps tomorrow will be a bright day. We’re not there yet. We hope it will be.”

The usually straight-faced McConnell echoed the sentiment, smiling briefly.

“We had a  good day,” he said. “It’s safe to say we made substantial progress, and we look forward to making more progress in the near future.”

Votes have not been scheduled in the Senate, and a threatened filibuster by tea party senators, including Sen. Ted Cruz, R-Texas, could prolong the debate. But experts have said the promise of a pending deal could calm the restless financial markets.

Any deal is expected to hit turbulence in the conservative House, however. Speaker John A. Boehner’s GOP majority has resisted compromise as the hard-right flank pursued a strategy of using the usually routine budget bills as leverage in their failed campaign to stop President Obama’s healthcare law.

House Republicans have become increasingly resentful of having legislation forced upon them by the Senate. With the debt deadline fast approaching, and the GOP suffering heavily in the polls for its handling of the crisis, Boehner, R-Ohio, may have little opportunity to amend the package – even if the struggling speaker could unify his troops around a common goal.

Boehner’s office on the opposite side of the Capitol from those of the Senate leaders was a hectic way station Monday as his leadership team filed in for private meetings. “If the Senate comes to an agreement, we will review it with our members,” Boehner spokesman Michael Steel said.

After a day of start-and-stop negotiations, the emergence of a potential Senate agreement was the first sign that the political stalemate could be easing as the nation enters the third week of a federal government shutdown, which is having damaging economic ripple effects nationwide.

 

Washington (CNN) — Two steps forward, one step back.

A surge of optimism on Monday for a possible compromise to end the partial government shutdown and avoid a U.S. default as soon as this week got jolted by the sudden postponement of a White House meeting between President Barack Obama and congressional leaders.

In a brief statement, the White House said the meeting announced earlier in the day was postponed “to allow leaders in the Senate time to continue making important progress” toward a solution. Two hours later, sources in both parties said it was unlikely to happen on Monday.

It was unclear if the development signaled a problem or was needed to give more time for talks between Senate Majority Leader Harry Reid and his Republican counterpart, Mitch McConnell, to finish an agreement that could win approval in the Senate and the House.

Negotiations heated up with the Democratic and Republican leaders signaling progress toward a positive result.

“I’m very optimistic that we will reach an agreement that’s reasonable in nature this week to reopen the government, pay the nation’s bills, and begin long-term negotiation to put our country on sound fiscal footing,” Reid said about an hour before he and other Democratic and GOP leaders were to have met with Obama.

McConnell said he shared Reid’s optimism that “we’re going to get a result that will be acceptable to both sides.”

At the same time, both sides noted that nothing had been finalized.

Now, the postponement of the meeting with Obama and Vice President Joe Biden raised a new question mark in the process.

During a visit Monday to a local food kitchen, Obama cited progress in the Senate negotiations but also warned of what he called continued partisan brinksmanship by House Republicans who “continue to think that somehow they can extract concessions by keeping the government shut down or by threatening default.”

“My hope is a spirit of cooperation will move us forward over the next few hours,” Obama siad.

The political stalemate in Washington caused the government to start shutting down on October 1 because Congress failed to authorize spending for the new fiscal year, which started that day.

Another deadline looms on Thursday, when the Treasury says it will need Congress to raise the debt ceiling so it can borrow more money to pay all the government’s bills.

During his visit to Martha’s Pantry in Washington, Obama said the congressional leaders could “solve this problem today.”

He warned that a default, in which the government would lack enough cash on hand to pay down its debt obligations as well as other daily bills such as Social Security checks “could have a potentially devastating effect on our economy.”

“We’ve already had a damaging effect on our economy because of the shutdown,” he said. “That damage would be greatly magnified if we don’t make sure that government’s paying its bills, and that has to be decided this week.”

Sen. Joe Manchin of West Virginia told CNN early Monday that a deal was 70% to 80% done, while Republican Sen. Bob Corker of Tennessee cited progress in talks with Manchin and other colleagues from both parties.

However, Manchin and moderate GOP Sen. Susan Collins of Maine, who have spearheaded the bipartisan talks, warned more work needs to be done.

By late Monday afternoon, Manchin sounded assured that an agreement was at hand to prevent a default, saying the goal was to get at least 65 Senate votes — which would mean 10 or more from Republicans — to help Speaker John Boehner generate GOP backing in the House despite certain opposition from the tea party conservative wing.

According to Manchin, Reid and McConnell must work out specifics.

The two party leaders met twice in the morning and early afternoon, and they offered their optimistic assessments following their second face-to-face discussion. Boehner also dropped by McConnell’s office to get an update on the talks, his aide confirmed.

Has shutdown affected you? Share your story with CNN iReport.

Democratic sources told CNN’s Dana Bash and Deirdre Walsh that the proposal under consideration by Reid and McConnell would fund the government through January 15, allowing it to reopen for at least three months or so.

At the same time, negotiations on a budget for the full fiscal year would have a deadline of reaching agreement some time in December, the sources said.

Meanwhile, the debt ceiling would be increased through February 15 to put off the threat of default for almost four months, according to the sources. The budget negotiations were expected to address deficit reduction measures and therefore could impact when the debt limit would need to be increased again.

In addition, provisions involving Obama’s signature health care reforms could be included, such as strengthening verification measures for people seeking federal subsidies to help them purchase health insurance required by the 2010 Affordable Care Act, the sources said.

Another possible change to the health care reforms would delay a fee on employers, unions and other plan sponsors that raise money to compensate insurance companies for taking on high-risk customers in the early years of Obamacare.

Early blowback from conservatives focused on the proposed budget talks, which would include flexibility to soften or eliminate forced spending cuts known as sequestration that were part of the agreement that resolved the last congressional showdown over the debt ceiling in 2011.

Corker said Democrats have retreated from a weekend push for the deal to wipe out the sequestration cuts, signaling progress on an issue that could have derailed agreement by both the Democratic-led Senate and the Republican-led House.

“It appeared the Democrats had wandered off the reservation and overreached over the last 48 hours,” said Corker, a veteran of many congressional budget battles.

However, a White House official said a goal for the agreement was to get time in the budget talks “to negotiate a buy down” of sequestration’s forced spending cuts.

CNN political analyst John Avlon said Monday that Democrats wanted to press what they perceive as an advantage over Republicans on how the public is perceiving the latest round of Washington budget and deficit brinksmanship.

“What’s behind it (are) poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship,” Avlon said.

Manchin said the brinksmanship was a chance to address what he called the “draconian cuts” of sequestration.

A new round of the across-the-board spending cuts for the military and other non-entitlement programs takes effect on January 15, he said.

Sticking point

As reported by CNN”s Bash and CNN Senior White House Correspondent Jim Acosta, the main sticking point for now involves how long an agreement would fund the government to end the shutdown and increase the debt limit to enable required federal borrowing.

Democrats want the debt ceiling increase to extend as long as possible to avoid similar showdowns in coming months.

At the same time, they seek a temporary spending plan to reopen the government while formal budget negotiations work out a longer-term agreement that can negate the impacts of the forced sequestration cuts.

Republicans, however, want a longer spending proposal that would lock in the planned sequestration cuts in coming months, with a shorter debt ceiling extension in order to negotiate further deficit-reduction measures.

Rallier tells Obama to ‘put the Quran down’

Watching developments closely in Washington, Wall Street greeted news of apparent progress in the Senate positively. Stock indexes reversed an early day slide to close higher. Bond markets were closed for Columbus Day.

Political leaders were mindful of the impact on financial markets if they signaled possible failure to reach agreement that would avoid a default.

“I believe we can do it,” Democratic Sen. Dick Durbin of Illinois said Sunday on NBC’s “Meet the Press.” “I hope sensible people prevail, because at this point, it’s not just a shutdown and all of the damage it’s caused, but if we default on our debt, it will have a dramatic impact on the savings account, on the retirement account of average Americans.”

On the other side of the aisle, Republican Sen. Rob Portman of Ohio said he also thinks Congress will find a way out of the crisis before Thursday, when the United States hits the debt ceiling.

“We will have decided as a Congress that we need to avoid going over the debt limit, and we’ll figure it out. And it will probably be a relatively short-term solution,” Portman said.

The crisis with an on/off switch

A weekend of rejections

Computer failure temporarily halts some food stamp payments

Despite the positive prognoses, the only actions over the weekend involved one “no” after another.

• Reid said Saturday the plan Collins was assembling was no longer on the table, because it treated reopening the government as a “concession.” Reid continues to demand that any plan include a “clean” bill, one that raises the debt limit and reopens the government with no strings attached. However, Manchin’s comments Monday indicated the Collins plan remained alive.

• Republicans blocked a measure to extend the debt limit with no strings attached, refusing to support a procedural vote that would have brought it to the Senate floor.

• House Republican leaders said Obama rejected their proposal for a six-week extension of the federal debt ceiling.

• Meanwhile, Republicans objected to the prospect being floated over the weekend that the forced spending cuts of sequestration, which have cut deeply into federal operations since March, might be rolled back under any eventual deal.

The Treasury Department said it will be unable to pay the government’s bills unless the debt limit is increased by Thursday.

Christine Lagarde, head of the International Monetary Fund, said Saturday the consequences of a failure to raise the debt limit would be dire for economies around the world. She spoke to CNN’s Richard Quest at an Institute of International Finance conference in Washington.

“You know, I’ve just spent the last two days with representatives of about 188 countries around the world. I wouldn’t say they are confident. I would say they are concerned, and they are very anxious to see this crisis resolved, because they know it’s going to impact on their economy,” Lagarde said.

Supporters stand by representatives and government shutdown

Obama spoke by phone with House Minority Leader Nancy Pelosi on Sunday to discuss the ongoing battle over the shutdown, the White House said. The two agreed on the need for a “clean debt limit increase” and a “clean continuing resolution to open up the government and end the shutdown.”

Mindful that the Thursday deadline is days away, House Republican leaders are considering all their options even as Republican and Democratic Senate leaders try to craft a deal on the debt ceiling, said a GOP leadership aide, speaking on the condition of anonymity.

One option Republican leaders are considering is sending back a measure to the Senate that would increase the debt limit; exactly what it would contain is unknown at this time.

But the aide noted that the House is able to move quicker than the Senate, and this idea could come into play. If a decision were made to pursue this idea, then it would require Democratic support to pass in the House.

7 crazy side effects from the shutdown

Senate Democrats meet with president

Will 2014 election solve anything?

Paul Ryan steps into budget fight

Conservatives defiant in the face of GOP troubles

CNN’s Dana Ford, Greg Clary, Deirdre Walsh, Mark Preston, Chelsea J. Carter, Dan Merica, Brianna Keilar and Janet DiGiacomo contributed to this report.

government shutdown2

[Breaking news update at 2:08 p.m.]

Senate Majority Leader Harry Reid and his Republican counterpart, Mitch McConnell, both said Monday they were optimistic they would forge a compromise acceptable to both parties to end the partial government shutdown and avoid a debt default as soon as Thursday.

[Original story moved at 1:55 p.m.]

Negotiations heated up Monday on a Senate compromise to end the partial government shutdown and avoid a possible U.S. default, with congressional leaders heading to the White House after talks cited as progress toward a deal.

“We’re getting closer,” Senate Majority Leader Harry Reid told reporters after meeting with his Republican counterpart, Mitch McConnell.

Reid said nothing was finalized, and that he hoped to have some kind of draft to take to the 3 p.m. ET meeting with President Barack Obama.

During a visit to a local food kitchen, Obama cited “some progress” in the Senate negotiations, but he also warned of what he called continued partisan brinksmanship by House Republicans.

“We’ll see this afternoon whether this progress is real,” Obama said of his upcoming meeting with the top Democrats and Republicans in the House and Senate.

“I think there has been some progress in the Senate,” he continued, adding that House Republicans “continue to think that somehow they can extract concessions by keeping the government shut down or by threatening default, and my hope is a spirit of cooperation will move us forward over the next few hours.”

Separately, House Speaker John Boehner and other top House GOP leaders will meet later Monday to discuss their options and consider preparing their own bill to raise the federal borrowing limit in the event the Senate talks break down.

The political stalemate in Washington caused the government to start shutting down on October 1 because Congress failed to authorize spending for the new fiscal year, which started that day.

Another deadline looms on Thursday, when the Treasury says it will need Congress to raise the debt ceiling so it can borrow more money to pay all the government’s bills.

During his visit to Martha’s Pantry in Washington, Obama said the congressional leaders could “solve this problem today.”

He warned that a default, in which the government would lack enough cash on hand to pay down its debt obligations as well as other daily bills such as Social Security checks “could have a potentially devastating effect on our economy.”

“We’ve already had a damaging effect on our economy because of the shutdown,” he said. “That damage would be greatly magnified if we don’t make sure that government’s paying its bills, and that has to be decided this week.”

Sen. Joe Manchin of West Virginia told CNN early Monday that a deal was 70% to 80% done, while Republican Sen. Bob Corker of Tennessee cited progress in talks with Manchin and other colleagues from both parties.

“I’m more optimistic today at 9:50 (a.m.) than I was at last night when I went to bed,” Corker told reporters.

However, Manchin and moderate GOP Sen. Susan Collins of Maine, who have spearheaded the bipartisan talks, warned more work needs to be done. According to Manchin, Reid and McConnell must work out vital specifics.

The two party leaders met around midday in McConnell’s office, and Reid offered his positive assessment when he walked out.

Has shutdown affected you? Share your story with CNN iReport.

According to Manchin, the framework under discussion would temporarily fund the government to end the shutdown and also raise the federal borrowing limit for a limited period.

At the same time, the proposal would set up House-Senate negotiations on a budget for fiscal year 2014, and delay for two years a tax on medical devices imposed under Obama’s signature health care reforms, Manchin said.

In another provision involving the 2010 Affordable Care Act, known as Obamacare, the proposed compromise would strengthen verification measures for people getting federal subsidies to purchase health insurance.

Manchin told CNN’s “New Day” that Reid and McConnell now “need to put the numbers to it.”

Early blowback from conservatives focused on the proposed budget talks, which would include flexibility to soften or eliminate forced spending cuts known as sequestration that were part of the agreement that resolved the last congressional showdown over the debt ceiling in 2011.

Corker said Democrats have retreated from a weekend push for the deal to wipe out the sequestration cuts, signaling progress on an issue that could have derailed agreement by both the Democratic-led Senate and the Republican-led House.

“It appeared the Democrats had wandered off the reservation and overreached over the last 48 hours,” said Corker, a veteran of many congressional budget battles.

CNN political analyst John Avlon said Monday that Democrats wanted to press what they perceive as an advantage over Republicans on how the public is perceiving the latest round of Washington budget and deficit brinksmanship.

“What’s behind it (are) poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship,” Avlon said.

Manchin said the brinksmanship was a chance to address what he called the “draconian cuts” of sequestration.

A new round of the across-the-board spending cuts for the military and other non-entitlement programs takes effect on January 15, he said.

Sticking point

As reported by CNN Chief Congressional Correspondent Dana Bash and CNN Senior White House Correspondent Jim Acosta, the main sticking point for now involves how long an agreement would fund the government to end the shutdown and increase the debt limit to enable required federal borrowing.

Democrats want the debt ceiling increase to extend as long as possible to avoid similar showdowns in coming months.

At the same time, they seek a temporary spending plan to reopen the government while formal budget negotiations work out a longer-term agreement that can negate the impacts of the forced sequestration cuts.

Republicans, however, want a longer spending proposal that would lock in the planned sequestration cuts in coming months, with a shorter debt ceiling extension in order to negotiate further deficit-reduction measures.

Reid and McConnell along with other top senators began discussions over the weekend.

The Senate and House were both scheduled to be in session on Monday afternoon.

A White House official indicated what Obama would tell congressional leaders at their meeting.

“With only a few days until the government runs out of borrowing authority, the President will make clear the need for Congress to act to pay our bills, and reopen the government,” the official said. “The President will also reiterate our principles to the leaders: we will not pay a ransom for Congress reopening the government and raising the debt limit.”

Rallier tells Obama to ‘put the Quran down’

Watching developments closely in Washington, Wall Street greeted news of apparent progress in the Senate positively. Stock indexes gained in afternoon trading after sharp early losses to start the week.

Mindful of the economic impact, senators from both parties expressed optimism a deal was in reach.

“I believe we can do it,” Democratic Sen. Dick Durbin of Illinois said Sunday on NBC’s “Meet the Press.” “I hope sensible people prevail, because at this point, it’s not just a shutdown and all of the damage it’s caused, but if we default on our debt, it will have a dramatic impact on the savings account, on the retirement account of average Americans.”

On the other side of the aisle, Republican Sen. Rob Portman of Ohio said he also thinks Congress will find a way out of the crisis before Thursday, when the United States hits the debt ceiling.

“We will have decided as a Congress that we need to avoid going over the debt limit, and we’ll figure it out. And it will probably be a relatively short-term solution,” Portman said.

The crisis with an on/off switch

A weekend of rejections

Computer failure temporarily halts some food stamp payments

Despite the positive prognoses, the only actions over the weekend involved one “no” after another.

• Reid said Saturday the plan Collins was assembling was no longer on the table, because it treated reopening the government as a “concession.” Reid continues to demand that any plan include a “clean” bill, one that raises the debt limit and reopens the government with no strings attached. However, Manchin’s comments Monday indicated the Collins plan remained alive.

• Republicans blocked a measure to extend the debt limit with no strings attached, refusing to support a procedural vote that would have brought it to the Senate floor.

• House Republican leaders said Obama rejected their proposal for a six-week extension of the federal debt ceiling.

• Meanwhile, Republicans objected to the prospect being floated over the weekend that the forced spending cuts of sequestration, which have cut deeply into federal operations since March, might be rolled back under any eventual deal.

The Treasury Department said it will be unable to pay the government’s bills unless the debt limit is increased by Thursday.

Christine Lagarde, head of the International Monetary Fund, said Saturday the consequences of a failure to raise the debt limit would be dire for economies around the world. She spoke to CNN’s Richard Quest at an Institute of International Finance conference in Washington.

“You know, I’ve just spent the last two days with representatives of about 188 countries around the world. I wouldn’t say they are confident. I would say they are concerned, and they are very anxious to see this crisis resolved, because they know it’s going to impact on their economy,” Lagarde said.

Supporters stand by representatives and government shutdown

Obama spoke by phone with House Minority Leader Nancy Pelosi on Sunday to discuss the ongoing battle over the shutdown, the White House said. The two agreed on the need for a “clean debt limit increase” and a “clean continuing resolution to open up the government and end the shutdown.”

Mindful that the Thursday deadline is days away, House Republican leaders are considering all their options even as Republican and Democratic Senate leaders try to craft a deal on the debt ceiling, said a GOP leadership aide, speaking on the condition of anonymity.

One option Republican leaders are considering is sending back a measure to the Senate that would increase the debt limit; exactly what it would contain is unknown at this time.

But the aide noted that the House is able to move quicker than the Senate, and this idea could come into play. If a decision were made to pursue this idea, then it would require Democratic support to pass in the House.

7 crazy side effects from the shutdown

Senate Democrats meet with president

Senate Democrats met with Obama on Saturday, and a Senate Democratic leadership aide said the party is unified.

“Democrats are willing to negotiate on anything Republicans want to discuss as soon as we reopen the government and pay our bills,” said the aide.

Another Democratic source said party leaders regard Republicans as lacking a coherent position. They hope McConnell can “cut through the clutter,” the source told CNN’s Dana Bash.

The sources, who are familiar with the talks, spoke on the condition of anonymity so they could speak candidly.

Will 2014 election solve anything?

Even as he demanded a “clean” bill, Reid said he and McConnell are involved in “cordial” and “preliminary” discussions.

“I hope that our talking is some solace to the American people and the world,” Reid said. He said McConnell had approached him. “This hasn’t happened until now,” Reid said.

Paul Ryan steps into budget fight

Conservatives defiant in the face of GOP troubles

CNN’s Dana Ford, Greg Clary, Deirdre Walsh, Mark Preston, Chelsea J. Carter, Dan Merica, Brianna Keilar and Janet DiGiacomo contributed to this report.

reid mcconnell

Offbeat
10/14/13

China urges a ‘de-Americanized world’

WASHINGTON — Upset that the fiscal stalemate in Washington is threatening the global economy, China called for the U.S. dollar to be replaced as the international reserve currency as well as for broader steps to create a “de-Americanized world.”

China also called for an end to the “pernicious impasse” in the U.S. over the raising the debt limit and ending the partial government shutdown, saying the world needed another reserve currency so nations could protect themselves “from the spillover of the intensifying domestic political turmoil in the United States.”

ChinaMost countries hold their foreign exchange reserves in U.S. dollars because the currency is viewed as the world’s most stable. China is the largest foreign holder of U.S. debt, with about $1.3 trillion in Treasury bonds, and is concerned about the impact of a U.S. failure to raise the debt limit on those holdings.

With Washington politicians still far from a deal as the Thursday deadline for raising the $16.7-trillion debt limit looms, China’s official state-run news agency published a sharply worded editorial Sunday criticizing U.S. leadership.

For more on this LA Times story, click here.

Politics
10/14/13

Government shutdown talks hit another snag

WASHINGTON – Talks in the Senate aimed at resolving the crisis over the federal budget hit a setback Sunday as Democrats, emboldened by GOP disarray, pushed their advantage, leading Republicans to warn against efforts to “humiliate” their party.

Although Senate leaders continued to talk, they appeared to make little progress over the weekend, dashing hopes that a deal could be announced before markets opened Monday. Some senators urged House Republican leaders to try again to push a measure through their chamber.

senateAs Senate Majority Leader Harry Reid (D-Nev.) opened a rare Sunday session, he said was confident a solution could be reached.

“We’re in conversation,” Reid said.

“It’s the height of hypocrisy to not pay our bills, the height of irresponsibility,” he added. “Americans want Congress to compromise.”

Reid and Senate Republican leader Mitch McConnell of Kentucky spoke Sunday, and Reid said later the discussions were “productive” and “substantive.”

The protracted stalemate has left Congress facing twin crises: Thursday’s deadline to raise the nation’s borrowing limit or risk a potentially catastrophic debt default, and a federal government shutdown that will enter its third week Tuesday.

Republicans had hoped they could use the standoff to gain leverage in their fight with Democrats over the budget and President Obama’s healthcare law, but find themselves in a dramatically weakened position. They have failed to unify around a common negotiating position and face polls showing that the public by large margins blames them for the stalemate.

As a result, a confrontation that started with the GOP on the offensive, driving to block or delay the healthcare law, has become a defensive effort by Republicans to hold onto budget cuts they achieved over the last several years.

On one level, the remaining issues up for debate are relatively small. Republicans have conceded that they will need to vote to end the government shutdown and extend the government’s ability to borrow money. At least in the Senate, they have given up their efforts to “defund or delay” Obamacare.

For more on this LA Times story, click here.

Chicago tribune editorial cartoonist Scott Stantis talks about best American cartoons on government shutdown.

cartoon

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