Nearly two days after commencing negotiations, and two weeks after the start of the government shutdown at the end of Sunday, October 13, 2013, the Senate Democrats and Republicans are at an impasse in agreeing on a deal that would reopen the government and raise the debt ceiling limit before the Oct. 17 deadline, but Senate leaders remain optimistic the catastrophe of a default will be averted in time.
The Senate met for an unusual Sunday afternoon session that lasted for four hours in effort to find a solution to the two crises. The two Senate leaders, Senate Majority Leader Harry Reid, D-NV., and Senate Minority Leader Mitch McConnell, R-Ky. have been engaging in discussions since Saturday morning, Oct, 12, after the House of Representatives failed to present a debt ceiling plan that pleased President Barack Obama. The Senate leader met only once on Saturday, but have been discussing the issue directly and spoke by phone Sunday.
Speaking on the Senate floor Sunday, Sen. Reid updated the Senate, stating; "I have had a productive conversation with the Republican leader this afternoon. Our discussions were substantive and we'll continue those discussions. I'm optimistic about the prospects for a positive conclusion to the issues before this country today." But, optimism does not lead to deals or solutions especially in Washington where bipartisan agreements are elusive, and real negotiations are disappearing from the President and Democrats' vocabulary.
The Republicans in the Senate had been working on a bill based on a proposal by moderate Republican Susan Collins, R-ME, who has devised a compromise solution that would end the shutdown by funding the government for six-months, raise the debt limit until January, delay the medical device tax for two years, require anybody receiving Obamacare subsidies to prove their income and allow agencies to determine how to allocate the sequester spending cuts. The Maine Senator was working primarily with Democrat Joe Manchin, D-W.Va. in an attempt at a bipartisan bill that would gain Democratic support.
The 23-page draft of Collins-Manchin plan was rejected by Majority Leader Reid on Saturday, even as his plan to raise the debt ceiling for 15 months failed to pass with a vote 53 to 45. At the heart of this most recent impasse are the spending and sequestration cuts in Collins' proposal, with new sequestration cuts, that will trim an additional $21 billion from the budget scheduled for Jan. 15, 2014 leaving the budget for 2014 at a maximum of $967 billion, the Democrats oppose the additional cuts, and also want the debt ceiling raise to be for longer and the continuing resolution for a shorter time than what Collins and the Republicans are proposing.
Minority Leader McConnell released a statement on Sunday about the refusal, which read; "There is a bipartisan plan in place that has the support of Democrat and Republican Senators. It would reopen the government, prevent a default, provide the opportunity for additional budget negotiations around Washington's long-term debt, and maintain the commitment that Congress made to reduce Washington spending through the Budget Control Act - the law of the land. It does all this while maintaining our commitments to reduce spending, cutting an Obamacare tax and improving anti-fraud provisions in the law. It's time for Democrat leaders to take 'yes' for an answer."
The Democratic senators consulting on Collins' plan, Sen. Manchin and five other Democrats issued a statement countering McConnell's, writing; "We have been involved in productive, bipartisan discussions with Senator Collins and other Republican senators, but we do not support the proposal in its current form. There are negotiations, but there is no agreement."
Sen. Collins was hopeful when speaking on CNN's "State of the Union" on Sunday, Oct. 13 about the impasse, stating; "It's taken far too long, we never should be in this situation, but I do believe we are going to see a resolution this week." However fellow Republican Senator Sen. Lindsey Graham, R-S.C., appearing on ABC's "This Week" was not nearly as optimistic and does not think there will be a deal by the deadline, saying; "I don't see one. If you break spending caps, you're not going to get any Republicans in the Senate." While across the aisle, Democratic Senator Charles Schumer, D-N.Y. appearing on CBS's "Face the Nation" expressed; "I'm cautiously hopeful, optimistic, that we can come to an agreement and open up the government and avoid default based on the bipartisan meetings that are going on."
Since ceasing negotiations with Speaker of the House John Boehner, R-OH and House Republicans Saturday morning, Oct. 12, President Obama's involvement with both crises has been kept to strictly partisan discussions, a meeting with Senate Democratic leadership Saturday afternoon at the White House and a Sunday phone call with House Minority Leader Nancy Pelosi. The White House statement later said; they "reinforced that there must be a clean debt limit increase that allows us to pay the bills we have incurred and avoid default. The House needs to pass the clean continuing resolution to open up the government and end the shutdown that is hurting middle class families and businesses across the country."
The government has been partially shutdown since the new fiscal year began on Oct. 1. The debt ceiling of $16.7 trillion will also reach its limit on Oct. 17, without passing a bill to raise the debt ceiling limit the U.S. will default on its loans.
At the core of the conflict is the Democratic Senate and President Obama wanting a "clean bill," a stop-gap spending bill referred to as a Continuing Resolution (CR) without out any provisions attached. The President has also been insisting on a clean bill to raise the debt ceiling limit, although he is now open to a short term debt raise as long as there are no perovisions attached.
While the Republican controlled House of Representatives at this point primarily want the individual mandate provision of Obamacare, the Affordable Care Act delayed in a bill reopening the government, allowing Americans the option to maintain their present healthcare coverage without any penalties imposed. Republicans also want spending cuts attached to the bill to raise the debt ceiling.
Approximately 800,000 federal employees are furloughed as a result of the shutdown out of 2 million, and will also affect all aspects of the government at a time when the fragile economy is just starting to recover.
There have been a total of 17 prior government shutdowns in American history between the 1970s and 1990s with the December-January, 1995-1996 shutdown being the longest clocking in at 21 days. Then as now a Democratic President Bill Clinton was in a fierce ideological battle with a Republican House of Representatives.
Playing a good game of cards President Obama and the Democrats are bluffing, acting like they want to negotiate, but they do not want to, they want to be the last ones standing after the battle ends. Their public relations campaign and blame game have been working with Republicans taking the brunt of the blame for the shutdown by large and widening percentage points in recent polls.
The most recent Wall Street Journal-NBC News poll has the Republicans bearing the blame for the shutdown by 53 percent, with Obama taking only 31 percent of the blame. The Democrats hope the reward will be regaining the House in the 2014 midterm elections. However, GOP pollster David Winston warned "All parties need to be concerned. The one thing we do know is that people are paying very close attention."
The guise of negotiations aside, Obama and the Democrats have wanted from the start that Republicans heed to their demand to pass a clean spending bill and raise the debt ceiling without any strings attached.
No matter how conciliatory they want to seem to the American public, according to the Washington Post the Democrats "drew a line in the sand" and will never budge, gambling with the country's reputation and economy, and global market on the line. International Monetary Fund chief Christine Lagarde appearing Sunday on NBC's "Meet the Press," warned that "The standing of the US economy would, again, be at risk," and continued; "If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over," comparing a debt default and its ramifications to the 2008 financial collapse. While World Bank chief Jim Yong Kim speaking at the World Bank-International Monetary Fund meetings stated; "we are now five days away from a very dangerous moment."
With the country on the brink, Democrats hope the Republican's will be the ones to blink first, but if they do not, Democrats should so not be sure they will remain untarnished in the long run.