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Senate leaders close to deal to open government, avert default

The Senate’s majority leader Harry Reid (pictured) and minority leader Mitch McConnell said they were near a resolution.

Andrew Burton/Getty Images

The Senate’s majority leader Harry Reid (pictured) and minority leader Mitch McConnell said they were near a resolution.

WASHINGTON — Senate leaders said Monday they were on the verge of a deal that would reopen normal government functions and stave off a calamitous default on the nation’s debt. But Senate action on the proposal was put off until at least Tuesday, and its fate in the House was uncertain.

The deal would require lawmakers from the House and Senate to craft a bipartisan budget plan by mid-December in hopes of ending the cycle of deadline-inspired crises that have paralyzed Washington.

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If a deal is concluded, it would mark a bipartisan cease-fire, at least temporarily halting the embarrassing spectacle of dysfunction that has gripped the nation’s capital and left the world’s economy in jeopardy.

“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 negotiations to put our country on sound fiscal footing,” Senate majority leader Harry Reid, a Democrat, said on the Senate floor, where he was joined by minority leader Mitch McConnell, a Republican.

“I share his optimism that we’re going to get a result that will be acceptable to both sides,” McConnell added.

Although the government shutdown began with Tea Party demands to halt or gut Obama’s health care law, the proposed agreement makes only modest changes to the law, according to a Senate leadership aide briefed on the plan. It would delay by one year an employer fee set to take effect in 2014. Labor unions, which in some cases would have been subject to the fee, had sought the delay. The plan would also institute new measures to verify the finances of low-income people who receive subsidies to buy insurance coverage, a Republican priority.

In addition, the deal would offer more flexibility for Obama in carrying out mandatory budget cuts that took effect this year known as the sequester.

But the proposed deal appeared to be a short-term fix, creating a new series of soon-to-arrive deadlines that could lead to another round of partisan wrangling. The government would only be funded at current levels through mid-January. And the deal would only lift the nation’s borrowing authority through Feb. 7.

Lawmakers were uncertain whether the deal, being crafted in the Democratic-run Senate, would be approved in the Republican-run House, where Tea Party conservatives have balked at previous compromises and expressed suspicion over the seriousness of the default threat. Senate Republicans were also planning to meet Tuesday morning to gauge support in the upper chamber.

“This is minute-to-minute, hour-to-hour, and I can tell you that what we’re hearing has been very encouraging,” said Senator Heidi Heitkamp, a North Dakota Democrat, as she emerged from a meeting with Reid Monday afternoon.

The partial government shutdown, which has left 350,000 workers on furlough, began Oct. 1. The potential for a worse crisis that would be set off by a potential default begins Thursday, the deadline set by the Treasury Department to raise the nation’s $16.7 trillion debt ceiling. The Dow Jones industrial average rose 64 points, in part due to news about Monday’s negotiations.

Despite the hurdles, Senate leaders said they were hopeful they could get a bill to President Obama by week’s end. Reid and McConnell met repeatedly behind closed doors Monday and said they were close to a resolution. A planned 3 p.m. White House meeting between the men, as well as with both leaders of the House, was postponed amid hope that a pact was close.

Opinion polls have shown that Republicans have taken a beating from the fiscal impasse.

Primarily, the proposed pact outlined Monday is intended to get Democrats and Republicans to the bargaining table to craft a longer-term budget.

“There’s never a guarantee,” said Senator Joe Manchin, a West Virginia Democrat who helped negotiate the latest plan.

But the deadlines are meant to spur a more functional process to crafting a federal spending plan, he said. “This is basically: Stop the nonsense. Get together and see what your differences are,” Manchin said.

Senator Bob Corker, a Tennessee Republican who has been critical of efforts by fellow Republicans to gut Obama’s health care law, said the pact offered an opportunity to refocus on deficit reduction.

“We’ve basically blown the last two months with some of our members and a lot of the House focused on a shiny object that was never going to happen,” Corker said. “So we find ourselves four days from a debt ceiling, and all of a sudden, 72 hours ago we began talking about the right subject, which is spending and entitlement reforms and those kinds of things.”

Corker said there were no major sticking points holding up the deal in the Senate, but cautioned that it “isn’t quite fully baked yet.”

Senate leaders are hoping that a strong bipartisan approval of the deal would put pressure on the House to agree. House Speaker John Boehner has so far been reluctant to let his chamber vote on any deal that would need the support of Democrats to pass. But he has also told moderate House Republicans that he would not risk a default and has been in regular contact with Senate leaders who are crafting the latest proposal.

Several House Republicans said Monday that they did not yet know if they would support a Senate-negotiated plan or whether they might make a counteroffer, citing lack of details about the proposal.

“They keep moving the ball and moving the ball, so it’s hard to say if anything’s serious,” said Representative Steven A. King, an Iowa Republican and one of the House’s more conservative members. “And the president has backed away from anything he has said he would agree to, so I’m just uncertain where all this is.”

Manchin said it is imperative that the bill attract support from at least 65 of the Senate’s 100 members, which would help Boehner make a case to wavering Republicans.

“I think they all realize how much is at stake,” Manchin said.

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Leaders discuss shutdown negotiations

“My hope is that a spirit of cooperation will move us forward. . . . If we don’t start making some real progress both in the House and the Senate, and if Republicans aren’t willing to set aside some of their partisan concerns in order to do what’s right for the country, we stand a good chance of defaulting.”

President Obama

“I’m very optimistic that we will reach an agreement that’s reasonable in nature this week. . . . I deeply appreciate my friend the minority leader for his diligent efforts to come to an agreement.”

Senate majority leader Harry Reid

“We have had an opportunity over the last couple of days to have some very constructive exchanges of views about how to move forward. Those discussions continue, and I share his optimism that we’re going to get a result that will be acceptable to both sides.’”

Senate Republican leader Mitch McConnell

“We’ve basically blown the last two months with some of our members and a lot of the House focused on a shiny object that was never going to happen.”

Senator Bob Corker, Republican of Tennessee

“If the Senate comes to an agreement, we will review it with our members.’”

Michael Steel, Spokesman for House Speaker John Boehner

Noah Bierman can be reached at nbierman@globe.com.
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