As I noted yesterday afternoon, the next best hope for a resolution of the continuing government shutdown/debt ceiling crises appeared to lie in negotiations between Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell. Almost as quickly as they started, though, those talks appear to be deadlocked over a completely new issue, the sequestration cuts that were a part of the Budget Control Act of 2011:
Talks on ending the government shutdown and preventing default have once again deadlocked, but this time it is Democrats who are demanding changes to current law as a condition for ending the impasse.
With the two sides now negotiating to extend government funding until at least January 31, Democrats are now insisting on spending increases — they want to end most of the cuts put in place as part of the so-called sequester. Democrats are still willing to accept a short-term deal to reopen the government at sequester spending levels (the Senate, of course, passed a 6-week extension on those terms), but now that talks are centered on funding the government into 2014, they are insisting on undoing some of sequester cuts. To Republicans, this is a non-starter, unless the sequester spending cuts are replaced with cuts to entitlement programs — and that is a non-starter for Democrats.
The impasse makes it more likely there will be no agreement when markets reopen Monday morning. If an agreement is not soon reached, it may be impossible to pass anything before October 17, the day the Treasury Department says the government risks default if Congress does not extend the government’s ability to borrow money.
Talks in the Senate began on an optimistic note Saturday when Democratic Leader Harry Reid and Republican Leader Mitch McConnell — two men who have been barely on speaking terms over the past several weeks — took the lead on crafting a deal that would reopen the government and extend the nation’s ability to borrow money until at least January 31. Republican leaders, beaten and battered in the polls and eager to end an impasse of their own creation, had dropped almost all their demands. Major changes to Obamacare, the Republican demand that started the mess in the first place, are now off the table.
Going into talks with Reid, McConnell was already preparing to deal with a backlash from tea party Republicans. In an interview with the Lexington Herald-Leader newspaper, McConnell said it was time for a “come together” moment with Democrats to prevent default and get the government reopened.
“As much as I would rather have a Republican president and would rather be the majority leader of the Senate, I am willing to work with the government we have — not the one I wish we had,” McConnell told the newspaper.
Sam Stein at The Huffington Post has reports that McConnell is standing firm:
WASHINGTON — Senate Republicans are holding the line against Democratic demands for a framework to alleviate the across-the-board spending cuts established by sequestration as part of any deal to end the government shutdown and raise the debt ceiling.
In talks between Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), the main sticking point is now where to establish funding levels for the federal government and for how long. The Republican offer made on Friday — to set spending at sequestration levels of $988 billion for the next six months — was rejected by Reid and others on Saturday on the grounds that it was too favorable to the GOP position and discouraged future negotiations.
By Sunday morning, little notable progress toward a resolution had been made. McConnell, according to sources, was adamant that the spending cuts of sequestration be maintained in any final arrangement.
“Sen. McConnell will defend the commitment Congress made on spending reductions; he’ll defend the law that Sen. Reid voted for and the president signed — and subsequently bragged about in his campaign,” said McConnell spokesman Don Stewart. “As I recall, Sen. Reid voted for, and President Obama signed the Budget Control Act [which established sequestration]. They may not like that the supercommittee didn’t act and we’re left with sequester, but under their own rhetoric, it’s ‘the law of the land.’”
Some of McConnell’s top deputies that echoed sentiment on the Sunday talk shows. “The president and leaders of Congress need to take the responsibility of dealing with the underlying problem and keep the budget caps in place,” Sen. Rob Portman (R-Ohio) told “Meet The Press.” “My gosh, we just put them in place two years ago.”
“If you break the spending caps, you’re not going to get any Republicans in the Senate,” Sen. Lindsey Graham, (R-S.C.) said on ABC’s “This Week.”
Other Senate Republicans have echoed these comments, making it clear that a proposal that tries to undo the sequester cuts would be a complete non-starter. More importantly, though, its rather obvious that any Senate deal that tried to do this would be dead on arrival in the House. Indeed, it’s doubtful that Speaker Boehner and his deputies would be able to bring such a bill to the House floor because of the massive opposition it would face even from House Republicans who might be inclined to accept a lesser deal to get the debt ceiling and the shutdown behind them. As George Will put it this morning, trying to break the sequester would be something that would unite all Republicans on Capitol Hill just at the time when there appear to be some fractures development inside both caucuses that could, under the right circumstances, result in enough votes to get a deal passed by both the House and the Senate in time to avert the October 17th debt ceiling deadline.
Bringing sequestration cuts into this discussion at what is almost literally the last minute seems like a completely bizarre move coming from the same party that has spent the last three weeks saying that they had already compromised by agreeing to go forward on the sequestration cuts rather than arguing over budget numbers that differed by some $80 billion (for purposes of the CR). To a large degree, Democrats have had the high ground here because they’ve been able to argue that they had already agreed to compromise on the budget by not seeking to undo the sequestration cuts as the Senate’s budget would have done. Now, they’re coming in at the last minute trying to use the negotiations to bring sequestration back into the debate. And they’re doing so despite the fact that it’s rather obvious that Republicans, especially Republicans in the House, are unlikely to agree to anything that touches the sequestration cuts just as Democrats are unlikely to agree to anything that touches the Affordable Care Act. To the extent this is an example of Democrats trying to squeeze concessions out of Republicans, it’s an understandable play. To the extent that they’re trying to move close to a deal, this isn’t a good development. Given the fact that the amount of time we have left to make a deal is shrinking rapidly, this doesn’t strike me as a positive development.
Reid and McConnell are apparently still talking, so I suppose that’s a good sign, but unless things become far more productive very quickly it’s starting to look less and less likely that we’ll see a deal before midnight on Thursday.
