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Boehner Seeks Republican Unity on Debt-Ceiling Increase

October 04, 2013

Boehner Seeks Republican Unity on Debt-Limit Amid Shutdown

Speaker of the House John Boehner (R-OH) walks through Statuary Hall to a vote on funding a small part of the government on Capitol Hill on October 3, 2013 in Washington, DC. Photographer: Brendan Smialowski/AFP via Getty Images

U.S. House Speaker John Boehner is trying to unite Republicans around a plan to reopen the federal government, raise the debt ceiling and achieve as many of the party’s priorities as they can.

There’s one major problem: the 232 members of his caucus can’t agree on how to do that.

Boehner is under pressure from multiple factions in his own party during a House Republicans’ meeting that began at 10 a.m. today in Washington, on the fourth day of a partial government shutdown that shows no signs of ending. He told members that he wouldn’t allow a U.S. default, according to a person in the room speaking on condition of anonymity to discuss the private meeting.

“The speaker has been trying to unify us for a long time,” Representative Devin Nunes, a California Republican and Boehner ally said yesterday. “The problem is it’s impossible as long as we have people out telling their constituents that there is a magical way to get 67 senators and 290 House members to override a presidential veto.”

One group is composed of anti-tax hard-liners who want to use the debt ceiling as leverage to gain concessions from President Barack Obama. Others want to take a more conciliatory stance and are urging Boehner to allow the government to re-open and drop demands related to the Affordable Care Act. It isn’t clear what the largest group -- 100 or so Republicans not clearly aligned with either side -- can support.

Canceled Trip

These disagreements are among the reasons why Republican leaders haven’t released a specific plan. Whatever they do will be designed to merge the disputes over a stopgap spending measure and the U.S. debt ceiling into one fight, in a bid to draw Obama into negotiations that he says won’t happen.

Obama last night called off a trip to Asia next week so that he can focus on getting congressional Republicans to vote on a spending measure to reopen the government, White House press secretary Jay Carney said in a statement.

“The cancellation of this trip is another consequence of the House Republicans forcing a shutdown of the government,” Carney said of the decision to drop plans to travel to Indonesia and Brunei for economic meetings. The president already had shortened the trip because of the shutdown.

The House will remain in session and voting tomorrow for its second straight weekend. Sunday votes aren’t expected, according to a Republican schedule.

Economic Harm

Democrats say the debt ceiling is no leverage at all, because both parties know it has to be raised this month to prevent global economic harm and because Obama won’t yield and repeat the negotiations he entered in 2011.

“There will be no negotiations over this,” Obama said yesterday in Rockville, Maryland. “The American people are not pawns in some political game. You don’t get to demand some ransom in exchange for keeping the government running.”

The partisan back-and-forth over the shutdown was interrupted yesterday by a mid-afternoon police chase and shooting outside the Capitol that injured two law-enforcement officers and killed a female suspect, said Cathy Lanier, chief of the Washington police.

U.S. stocks rose. The Standard & Poor’s 500 Index climbed 0.4 percent at 10:48 a.m. New York. Ten-year Treasury yields rose from almost a seven-week low, increasing three basis points to 2.64 percent, according to Bloomberg Bond Trader prices.

No Default

BlackRock Inc.’s Laurence D. Fink and Pacific Investment Management Co.’s Bill Gross said yesterday the budget standoff will be resolved without a debt default. The two fund company executives, whose firms oversee more than $5.8 trillion in combined assets, spoke at an event hosted by the UCLA Anderson School of Management, of which they’re both alumni, at the Beverly Hilton hotel in California, and streamed on CNBC.com.

The effects of the shutdown continued to ripple through the government and the country yesterday.

The Bureau of Labor Statistics said it wouldn’t release today’s report on unemployment, repeating what it did in the 1996 shutdown. U.S. efforts to enforce sanctions on Iran are being hurt because of Treasury Department furloughs, Under Secretary of State for Political Affairs Wendy Sherman said.

Other government services continued uninterrupted, including Social Security benefits, mail delivery and and air traffic control.

Treasury Report

The Treasury Department yesterday released a report about the consequences of reaching the debt ceiling, saying it could have catastrophic results that last decades such as higher interest rates and slower economic growth.

The U.S. will run out of borrowing authority Oct. 17 and will have $30 billion in cash after that. The country would be unable to pay all of its bills, including benefits, salaries and interest, sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.

Savings from the partial shutdown would only delay that date by no more than “a couple of days,” according to the Bipartisan Policy Center in Washington.

House Republicans continued their strategy of passing piecemeal bills to fund parts of the government. The House has now passed five measures with bipartisan votes.

Republicans released text for 10 more proposals, including bills that would fund infant nutrition, the Food and Drug Administration, intelligence agencies, weather monitoring and Head Start preschool programs. They said they may also consider a bill to give retroactive pay to furloughed federal employees.

Medical-Device Tax

A bipartisan group of House members suggested repealing a medical-device tax, offsetting lost revenue with a pension funding provision and reviving last year’s funding levels until March 2014.

Senate Democrats and Obama continued to reject those ideas, saying they pit agencies and interests against each other. Giving in now would only embolden Republicans to seek more concessions, said Senator Charles Schumer, a New York Democrat.

“The hope is maybe once the Tea Party has realized it’s not getting its way on shutting down the government, that they won’t try the same stunt on debt ceiling,” Schumer said. “If they do, by the way, the heat on them will be much, much greater than it is now. They know that.”

Instead, Obama said, the “only way out” is for Boehner to let the bipartisan House majority vote on a bill to reopen the government that wouldn’t affect the Affordable Care Act.

Republican Votes

As he puts together the debt-ceiling plan, Boehner has little room to maneuver. Republicans have a 232-200 majority in the House, which means that they can lose support from only 15 of their members on a bill that doesn’t attract any Democrats.

Boehner, of Ohio, has been telling Republicans that he won’t allow the U.S. to default on its debt, even if that requires Democratic votes, according to two Republican congressional aides.

Last month, Boehner, 63, outlined a debt-limit increase strategy that also included lighter regulations, cuts in entitlement programs and approval of TransCanada Corp. (TRP)’s Keystone XL pipeline.

The outline included means-testing Medicare, reducing the changes to malpractice law and eliminating social services block grants. Also being considered was a proposal to eliminate a requirement that gives regulators authority to seize and dismantle financial firms if their failure could damage the stability of the U.S. financial system.

Some Republican lawmakers, such as Representatives Paul Broun of Georgia and Mo Brooks of Alabama, said the plan didn’t do enough to cut spending, and Boehner shelved it in favor of focusing on a bill to fund the government and curb the 2010 health law.

‘Pretty Serious’

Representative Raul Labrador said that he was having “pretty serious” discussions with Republican leaders about combining the spending debates and what a deal might look like.

“As long as we understand we need to get something for the CR and something for the debt ceiling, then everything’s on the table,” the Idaho Republican said yesterday in an interview, referring to the continuing resolution to extend government funding.

Labrador wouldn’t say exactly what he’d ask for in such a deal, saying that “we all want” entitlement reforms and that Obamacare should be “on the table.”

“Maybe we can hold hands and actually make those tough choices together,” Labrador said.

2011 Debate

On previous fiscal issues, including the 2011 debt-limit increase and the lapse of tax cuts at the end of 2012, Boehner united Republicans around partisan bills to set a party position and then allowed a bipartisan vote on final deals reached by senators of both parties and Obama.

In both cases, the first version that passed the House received fewer than 20 Democratic votes and the final versions were backed by at least half of the Democrats.

Some lawmakers could accept a debt-ceiling increase without conditions if Republicans are in talks to reduce the U.S. debt burden, said Representative James Lankford of Oklahoma.

“I don’t think there’s energy in the Republican conference to have any kind of default,” he said.

Representative Darrell Issa, a California Republican, said he doesn’t believe Democrats’ statements that they would be willing to have “meaningful negotiations” on the Affordable Care Act after Republicans agree to reopen the government and raise the debt ceiling.

“There is opportunity to get rid of waste in government,” Issa of California said in an interview for Bloomberg Television’s “Capitol Gains,” airing today. “And I think the debt ceiling and every appropriations bill should be an opportunity to have that discussion.”

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; Michael C. Bender in Tallahassee at mbender10@bloomberg.net; Heidi Przybyla in Washington at hprzybyla@bloomberg.net

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


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