Bloomberg News

House Without Plan as Senate Poised to Pass Spending Bill

September 27, 2013

House Republicans Without Plan as Senate Set to Pass Budget Bill

The Peace Monument memorial stands in front of the U.S. Capitol in Washington, D.C. on Sept. 27, 2013. Photographer: Andrew Harrer/Bloomberg

House Republicans still don’t have a plan for avoiding the government shutdown scheduled to start Oct. 1 as the Senate prepares today to pass a short-term spending bill and challenge the House to act.

House leaders haven’t determined how to respond to the Senate bill funding the government through Nov. 15, said a Republican leadership aide who spoke on condition of anonymity. The Senate is poised to pass a bill without Republican-backed provisions to defund the 2010 health-care law.

House Speaker John Boehner’s efforts to shift his members’ focus to the next fight -- over raising the debt limit -- were set back yesterday. Some House Republicans objected to Boehner’s tactic of holding a quick vote on the his debt-limit plan, instead preferring to fight longer on the spending bill.

Boehner’s repeated revisions of his strategy show the difficulties he has in getting House Republicans to unite behind any particular approach. That internal party dynamic -- along with Democrats’ unwillingness to accept major changes to Obamacare -- makes the path to avoiding a shutdown difficult to see.

“There is not an eagerness among the conservatives in the House to jump into a trillion-dollar debt ceiling increase discussion right now, especially when you have a real legislative fight over Obamacare already ongoing,” said Dan Holler, communications director for Heritage Action for America, a small-government group. “It makes a ton of sense to see how that plays out.”

Stocks Fall

Concerns that the budget impasse will hurt economic growth helped send the Standard & Poor’s 500 index to its first weekly decline since August. The S&P 500 fell 8.21, or 0.5 percent, to 1,690.46 at 10:18 a.m. in New York.

The benchmark 10-year Treasury notes headed for their longest weekly winning streak since April. The 10-year yield dropped three basis points, or 0.03 percentage point, to 2.62 percent at 10:03 a.m.

Today’s Senate votes, scheduled to start at 12:30 p.m. in Washington, will begin a weekend of negotiating and brinkmanship that could continue until spending authority expires at the end of Sept. 30.

Boehner said yesterday the House wouldn’t pass a “clean” spending bill after the Senate acts and then said he has “no interest in seeing a government shutdown.”

“There will be options available to us, there’s not going to be any speculation about what we’re going to do or not do, until the Senate passes their bill,” he said.

The calendar gives lawmakers few options, particularly in the Senate, where a single member can force as many as four days of debate on a bill. One option for Senate Democrats would be to leave Washington once their version of the bill is passed and won’t accept any changes.

New Bill

Such a move would put pressure on the House to accept the Senate’s version or risk a shutdown starting Oct. 1.

If the House’s next volley set aside the Senate’s version and used a new bill, that would signal the chamber’s leaders were reserving the option of later passing the Senate measure unchanged to avert a shutdown at the last minute.

Boehner has been trying to focus on what he has called a “whale of a fight” over raising the $16.7 trillion debt limit, which will be necessary in October to prevent the government from being able to pay all its bills, according to the Congressional Budget Office.

A prolonged shutdown could reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on its length, economists say, as government workers including park rangers and telephone receptionists are furloughed.

Debt Plan

Boehner yesterday outlined for members a plan that would pair spending cuts, eased regulations and a delay in the 2010 health-care law with an increase in U.S. borrowing authority. Republican Representatives Paul Broun of Georgia, Louie Gohmert of Texas, Tim Huelskamp of Kansas and Mo Brooks of Alabama said they were opposed.

The Republican debt-limit bill would seek to increase means-testing for Medicare, reduce the Medicaid provider tax, revise medical malpractice law and eliminate a public-health fund as part of the 2010 law. Republicans also want to eliminate a tax on medical devices and require a Social Security number in order to receive a child tax credit, according to the proposal.

Representative Devin Nunes, a California Republican, said the party can best achieve its long-term goal of reducing federal debt by focusing on the borrowing authority, not the short-term spending fight.

‘Few Members’

“It’s just a fiasco created by a very few members,” he said. “I don’t see this as a long-term strategy.”

Nunes said the House should pass the loaded-up debt ceiling bill quickly, to get it to the Senate, where provisions limiting Environmental Protection Agency regulations and approving the Keystone XL pipeline could put pressure on Democratic senators who support those items.

“We’ve got to get it out of here and over there,” he said.

Representative Mark Meadows, a North Carolina Republican, said he preferred a fight over Obamacare during the spending debate, saying it carried less economic risk using the debt ceiling as leverage.

“I see the debt ceiling as having greater economic consequences,” Meadows said. “If you look at the economic impact of a government shutdown versus potentially not raising the debt ceiling, they are very, very different dynamics.”

No Negotiations

President Barack Obama said he is refusing to negotiate over the debt ceiling.

Senator Richard Durbin of Illinois, the chamber’s second-ranking Democrat, said it’s irresponsible to seek concessions on the spending bill.

Political bargaining on the stopgap measure or the debt limit increase means that “we’re finished,” Durbin said on Bloomberg Television’s “Capitol Gains” airing this weekend. “We’ll do this every time, maybe five or six times a year. What’s that going to do to us as a nation, to our government, to our reputation or to our economy?”

The Senate votes today will test the clout of Republican Ted Cruz, who is trying to prevent Democrats from cutting off debate and stripping out the House language that chokes off Obamacare funding.

Republicans including Minority Leader Mitch McConnell of Kentucky and Bob Corker of Tennessee, have said they plan to vote to end debate.

The spending bill is H.J. Res 59.

To contact the reporters on this story: Richard Rubin in Washington at rrubin12@bloomberg.net; Roxana Tiron in Washington at rtiron@bloomberg.net; Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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