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G.O.P. Senators See Outline for Debt Deal After Obama Meeting Short-Term Solution for Fiscal Crisis Appears Closer
(about 5 hours later)
WASHINGTON — Republican senators emerged from a meeting at the White House on Friday afternoon expressing confidence that a deal could be reached in a matter of days that would end the government shutdown and extend the nation’s borrowing authority, but cautioning that details of an agreement, including the length of an extension, still needed to be worked out. WASHINGTON — The impasse over the nation’s finances appeared closer to a short-term resolution on Friday as President Obama and Congressional Republicans showed greater flexibility but headed into the weekend without a deal to reopen the government and raise the debt ceiling.
“I’m glad we had the discussion,” said Senator Kelly Ayotte, Republican of New Hampshire. “Now we have to put the words into action and get this resolved.” While the outlines of an agreement that would involve a temporary fix followed by longer-term budget talks came into view, the president and lawmakers faced the challenge of framing such a deal in a way that they could all accept politically.
Senator Rob Portman, Republican of Ohio, said there was no breakthrough, but a general sense that at least the two sides were listening to each other now. “The president was willing to listen as well as give his point of view,” he said. “So I think it was helpful.” “We’re obviously in a better place than we were a few days ago in terms of the constructive approach that we’ve seen of late,” Jay Carney, the White House press secretary, said late in the day after the president met with the entire Senate Republican conference and consulted by telephone with Representative John A. Boehner, the Republican speaker of the House. “But there’s not an agreement.”
Significantly, the president signaled that he could be flexible in reaching a deal, said Senator Lisa Murkowski of Alaska. He said he was open to the idea of giving Republicans something on their policy wish list, Ms. Murkowski said, if they in turn agreed to give Democrats something — but only on the condition that the government reopens and the debt ceiling is raised. Both houses of Congress were scheduled to meet over the weekend. But White House officials and senior lawmakers cautioned against expecting a quick deal, although much of the incendiary rhetoric that has characterized the fiscal fight had given way to words like “constructive” and “progress.”
“He said ‘space for trading,'” Ms. Murkowski said. “So apparently we are not talking about negotiation, we’re talking about some trading space.” Republicans in the Senate emerged from a 90-minute meeting with Mr. Obama at the White House with a collective sense of tempered hope. A coalition of Republicans, many of them centrists from independent-leaning states who have been openly critical of the aggressive posture of their House colleagues, was trying to find room to maneuver in a very tight space.
After the White House meeting, Senator Susan Collins, Republican of Maine, and Senator Joe Manchin III, Democrat of West Virginia, continued work on a proposal they hope could get bipartisan support in the Senate. The plan, according to an aide with knowledge of the discussions, would extend the nation’s borrowing limit through the end of January and include a stopgap spending measure at sequestration levels that would reopen the government and finance it through the end of March. Government agencies would have flexibility on how to handle the across-the-board spending cuts. Democrats, led by Senator Harry Reid, the majority leader, have repeatedly said they will not negotiate over reopening the government or raising the debt ceiling. But privately, a growing number of them said they have come to the realization that to insist on giving nothing to Republicans at all is a bargaining position they may be unable to maintain.
The plan also would call for an immediate bipartisan conference for the House and the Senate to begin negotiations over a budget, with the expectation of producing an agreement by the middle of January. What they give and how a compromise could be structured so it allows the president and Democratic leaders to say credibly that they have not reversed their hard-line position is unclear. White House officials said the president would be willing to sign a short-term increase in the debt ceiling and then negotiate on larger budget issues, but not if the two were explicitly linked.
The aide added that there also would be either a delay or an easing of a tax on medical devices that is part of the health care law, but that the repeal of the tax was now off the table. Senator Lisa Murkowski of Alaska, one of a handful of Republicans who often reaches across the aisle, said Mr. Obama told them he would be willing to “trade” something in exchange for their cooperation.
Attendees at the White House meeting said that when a version of the proposal was discussed, the president listened carefully, and indicated it could serve as a good starting point for an agreement. “He said ‘space for trading,’ ” Ms. Murkowski said. “So apparently we are not talking about negotiation, we’re talking about some trading space.”
“He described it as constructive, as having elements that could be worked on, but I don’t mean to give you the impression that he endorsed it and said, ‘What a great plan.’ He didn’t,” Ms. Collins said. But among some Democrats, especially Mr. Reid, there was a growing concern that the White House would be willing to bargain away too much — a sense, as one senior Democratic aide put it, that history was repeating itself. Many liberals were angry after the White House cut budget and tax deals in the past that they felt gave in too much to conservative demands, most recently over the fiscal cliff talks late last year that resulted in higher taxes on the wealthy but not as high as some would have liked.
Negotiations over the proposal among a bipartisan group of senators have received the blessing of Senator Harry Reid of Nevada, the majority leader. White House officials said their allies need not worry. Confident that he had the upper hand politically, Mr. Obama met with or talked by phone with business leaders and state governors to enlist them to lobby Congress to avoid a default. Aides said he was holding firm against any deal that included specific concessions sought by Republicans, particularly involving his signature health care program.
Though Republicans in both chambers have largely tabled the effort to “defund Obamacare,” as its proponents call it, Senator Ted Cruz, Republican of Texas and a leader of the movement, said he reiterated his view to the president that changes to his health care law should be part of any deal. “It is our view that we cannot have a situation where the debt ceiling is extended as part of a budget negotiation for only six weeks, which would put us right back in the same position that we’re in now,” Mr. Carney said. But “he has seen indications from Republicans in both the Senate and the House in the last 24 hours that they too are interested in engaging in serious budget negotiations” if the government is first reopened and the borrowing limit raised.
“The outcome needs to be we should fund the government, and we should provide real relief to the millions of people who are losing their job or forced into part-time work or losing their health insurance because of Obamacare,” Mr. Cruz said. “That should remain the focus, and I hope it does.” Mr. Reid has put in motion a process for the Senate to begin voting on Saturday on a Democratic plan to raise the debt limit through the end of 2014, a move designed to pressure Republicans to avert what could be a devastating default after the government reaches the current borrowing limit on Oct. 17.
Any path to compromise remains uncertain, given how firmly Democrats have insisted that they will accept nothing other than debt ceiling and budget bills that contain no Republican add-ons. The first step in the process is a motion to open debate on the debt-ceiling measure, but there is not currently enough Republican support to pass it. Members of both parties planned to talk throughout the weekend to come up with an alternative.
Senator Lindsey Graham, Republican of South Carolina, said he sensed some flexibility in the president’s willingness to step back from the no-negotiations line he has taken as a condition for reopening the government. Senator Jeff Flake, Republican of Arizona, said he was eager for the Senate to take the lead in negotiating with Mr. Obama on reopening the government. “House Republicans so far don’t want to get rid of the shutdown, and I don’t know in what world we’re faring well in the shutdown in terms of policy or politics, so in that sense, yeah, I’d rather have the Senate,” he said.
“Here’s what I mentioned to the president: ‘Listen, I understand where you’re coming from protecting the presidency, but you can’t tell the Congress you will reopen the government, you will pass a continuing resolution and you will raise the debt ceiling, then I will talk to you,'” Mr. Graham said. “As a body, we can’t give that authority away.” Mr. Graham added that he believed the president was receptive. Senators Susan Collins, Republican of Maine, and Joe Manchin III, Democrat of West Virginia, were crafting a plan to extend the borrowing limit through the end of January and include a stopgap spending measure that would reopen the government through the end of March. Government agencies would have flexibility on how to handle existing across-the-board spending cuts.
“I think he understands that’s a point of view that he used to hold when he was over here,” he said. Their plan also would call for a delay or an easing of a tax on medical devices and an immediate bipartisan conference for the House and the Senate to begin negotiations over a budget, with the expectation of an agreement by mid-January.
Though some senators said that any plan they put forth would also need to pass muster in the Republican-controlled House, Senator Jeff Flake, Republican of Arizona, was eager for the Senate to take the lead in negotiating with Mr. Obama on reopening the government. Ms. Collins said the president described the plan “as constructive, as having elements that could be worked on.”
“House Republicans so far don’t want to get rid of the shutdown, and I don’t know in what world we’re faring well in the shutdown in terms of policy or politics, so in that sense, yeah, I’d rather have the Senate,” he said. She added, “but I don’t mean to give you the impression that he endorsed it and said, ‘What a great plan.’ He didn’t.”
Mr. Flake also said that while a repeal of the medical device tax, which is unpopular with some Democrats, came up, the issue was “not resolved.” But he added that the president did show some willingness to tweak other aspects of the health care law. “He said individual things that needed to improve the act — not gutted — that he’d look at, but obviously not in the context,” Mr. Flake said. A new poll from NBC News and The Wall Street Journal highlighted the peril for Republicans, showing that they have shouldered a far larger share of the blame for the government shutdown than Mr. Obama. Just 24 percent of Americans viewed the Republican Party favorably, an all-time low in the survey.
Though no specific agreement was reached, Senate Republicans described the meeting as productive, and said they were feeling, in the words of Senator Mike Johanns of Nebraska, “optimistic.” Attendees said they discussed potential spending cuts and changes to entitlement programs that Mr. Obama had previously proposed — like means testing for Medicare and a new way of calculating inflation to slow the growth of benefits — but were unable to agree on any specifics. Republican lawmakers and aides repeatedly brought up the poll on Friday. “The reality is we are, in the eyes of the American people, in very bad shape,” said Senator John McCain, Republican of Arizona. “You can’t argue with those polls.”
“We talked about what he has in his own budget,” Mr. Flake said. “The question was: Do you do that without revenue? And what context? Is it just sequester replacement or relief? There was much said but no definitive answer there. That was a bit frustrating on our part.” To the dismay of conservatives, discussions about including revisions to Mr. Obama’s health care program have been dropped from most serious negotiations. An e-mail plea from the group Tea Party Express summed up their frustration on Friday. “Are you like us and wondering where the fight against Obamacare went?” it asked.
There was also movement, the senators said, toward a two-pronged approach that would both end the shutdown and extend the debt ceiling deadline, while setting the stage for broader, bipartisan negotiations over the budget. Senate Republicans have insisted on dropping efforts to dismantle the law. At a lunch meeting in the Capitol earlier this week, Mr. McCain asked the roomful of Republican senators if any still thought reversing parts of the program was an achievable goal now, according to a person briefed on the meeting. No one raised a hand, not even Senator Ted Cruz of Texas, the public face of the conservative push in Congress to repeal the law.
“The key is how do we get reforms in savings that enable us both to agree on reopening the government and address the debt ceiling?” said Senator John Hoeven, Republican of North Dakota. “The discussion was about doing all of the above, both getting the government open and addressing the debt ceiling. The question is: How do we bring these ideas together in the right combination to get all of it done?”
Even as negotiations showed some signs of progress, the Senate prepared to debate a proposal to raise the debt ceiling through next year, a move that Democrats have designed to pressure Republicans in both houses of Congress to act swiftly to avert what could be a devastating default.
The move to open debate on the debt ceiling plan, which could come as early as Friday afternoon, is only the first step in a long procedural process that would set up a final vote in the Senate early next week. Senate Republicans could still object, pushing the preliminary vote to Saturday.
But whether enough Republicans would join Democrats in support of the debt ceiling increase is unclear. And a vote to shelve the plan would be yet another setback in the slow and inconclusive talks that continue with few signs of real progress.
Six Republicans would need to break ranks with their leadership for the debt limit bill to move forward. But so far the Republican leadership has objected to any proposal that raises the debt limit with no conditions — something Democrats have insisted on, saying that they will not be pressured into making concessions with a default looming.
House Republicans continued to try to find a way to reach a deal with the White House, after they failed to agree on Thursday on a Republican plan for a six-week extension of the nation’s borrowing authority. The two sides continued to pursue other options throughout the night and into the day Friday.
Mr. Reid reiterated on Friday that the House plan was going nowhere in the Senate.
“They’re talking about extending the debt ceiling for two months,” Mr. Reid said. “Please.”
Doing so, he said, would only plunge the country into economic crisis right before the busy holiday shopping season.
“Using their theory,” he said, “we would have another one of these periods of bedlam here in Washington right before the most important purchasing season at any time during the year: Christmas.”
With Washington inching toward a resolution to the budget standoff, Republicans grappled with new polls showing that the public overwhelmingly blames them for the fiscal dispute. In an NBC/Wall Street Journal survey released Thursday evening, 53 percent of the public blamed Republicans, while 31 percent blamed Mr. Obama. Just 24 percent of those surveyed said they had a favorable opinion of Republicans.
The survey found that just 21 percent of Americans view the Tea Party movement favorably, while it suggested that Mr. Obama has received less blame for the nation’s fiscal problems. The president was viewed favorably by 47 percent of those surveyed, while 41 percent viewed him unfavorably.
Perhaps motivated by those numbers, Republicans on Friday sounded more conciliatory than they had during weeks of often angry words from both sides in the tense budget standoff.
“We decided that it would be best moving forward if we focused on moving forward,” said Representative Howard “Buck” McKeon, Republican of California, on MSNBC’s “Morning Joe” program. “People here want to do what’s right.”
He added, “At the end of the day, we are going to get this worked out, and hopefully it will be good for the nation.”
Economists across a broad spectrum agree that breaching the debt limit would damage the economy. Any temporary extension of the borrowing authority could temporarily remove that threat.