WASHINGTON — Congress returns to Washington on Wednesday to contend with a government shutdown, two financial deadlines and two presidential elections.
As Democrats and Republicans split over a plan to end the government shutdown, and conservative lawmakers threaten to vote against raising the debt ceiling, the country is poised to face a three-month shutdown — and something very close to a catastrophic default on its financial obligations.
The emerging deal won’t resolve the federal government’s $18 trillion debt ceiling or a temporary measure to keep federal agencies funded. Instead, the proposal buys time to resolve those crucial issues and avoid a full-on federal government shutdown.
Under the proposal, lawmakers and the president would promise to reach a resolution to both issues by a Feb. 8 deadline.
If neither side achieves that, then Treasury Secretary Jacob Lew would be able to use “extraordinary measures” to delay or postpone the increase in the government’s borrowing authority until late February. That would include putting on hold roughly $117 billion in payments the government has to make this year, including more than $11 billion in Social Security benefits.
The bill would also delay the massive federal health care law known as Obamacare by two years, which would also delay or postpone for two years a scheduled cut in reimbursements to Medicare providers. The provision was widely expected to win support from House Speaker John Boehner, R-Ohio, and House Republicans.
The Senate, which is back in session on Wednesday, is expected to vote on the deal Wednesday afternoon, but it faces resistance from conservative Republicans. Sen. Ted Cruz, R-Texas, a leading GOP critic of the Obama administration, said in a statement, “any budget agreement must contain full defunding of Obamacare and delay or repeal the worst provisions of Obamacare, not just delay.”
Republican leaders prefer the longer-term debt-ceiling proposal because of its longer-term effects on the debt crisis. Under the shorter term, the government could default on its debts for an additional 11 months. They also say they will use the threat of using the House floor to try to extract concessions from the White House in exchange for raising the debt ceiling.
The deals end a three-week period that produced a partial government shutdown, delays in the start of the health care law and a bruising debate over a proposal to reform the nation’s fiscal system. The politicians traded budget and debt-ceiling proposals and forced Democrats and Republicans to negotiate over reopening the government.
But no measure passed.
A measure to fund the government for three months and avoid a partial government shutdown was offered by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., late Tuesday. It was expected to pass easily, perhaps late Tuesday or early Wednesday. House Speaker John Boehner, R-Ohio, said he’d give the bill a vote in the House.
But as the Democratic-led Senate passed the measure, conservative House members met with some success in gaining a provision forcing the House to approve measures to defund or delay President Barack Obama’s health care law.
The maneuver was aimed at striking back at Boehner, who had lent his approval to such efforts when the bill was being drafted earlier this month, and has repeatedly refused to allow the issue to come to a vote on the House floor. The legislation advanced only after nine House Republicans voted against the measure in an embarrassment for leadership.
The long-term deal struck by Boehner and Reid, along with their Senate counterparts, does not address the nation’s looming fiscal crises. Obama could probably take the new funding and debt-ceiling provisions to a national election next year.
Should congressional Republicans find success in their attempts to raise the debt ceiling to win concessions from the White House, the government would go into default and its full faith and credit could be called into question. The government has never defaulted on its debt before.
But the Republican strategy could backfire if Obama is re-elected next year and his base doesn’t buy the strategy. Many in the GOP may not want to risk a repeat of a 1995-96 struggle over a clean debt ceiling bill.
In addition, lawmakers are already angling for the best possible outcome before the January elections. Boehner said Tuesday that the short-term extension in funding is only temporary. He said he hopes the country won’t need the money after the new Congress convenes, and that members of the new House majority won’t be eager to “ring the bells of the federal government every few months.”
Rep. Steve Israel, D-N.Y., the chair of the Democratic Congressional Campaign Committee, said in a statement: “This bill tonight will pay for a failed strategy and affirms that Republicans in Congress will play by their own rules and put our nation’s credit at risk for their power and politics.”