GAME OVER! REBOOBLICANS LOSE. DEFAULT AVOIDED, GOVT REOPENS

N.Y. TIMES

Congressional Republicans conceded defeat on Wednesday in their bitter budget fight with President Obama over the new health care law as the House and Senate approved last-minute legislation ending a disruptive 16-day government shutdown and extending federal borrowing power to avert a financial default with potentially worldwide economic repercussions.  The Senate voted overwhelmingly on Wednesday evening, 81 to 18, to approve a proposal hammered out by the chamber’s Republican and Democratic leaders after the House on Tuesday was unable to move forward with any resolution. The House followed suit a few hours later, voting 285 to 144 to approve the Senate plan, which would fund the government through Jan. 15 and raise the debt limit through Feb. 7.  Most House Republicans opposed the bill, but 87 voted to support it.

The result of the impasse that threatened the nation’s credit rating was a near total defeat for Republican conservatives, who had engineered the budget impasse as a way to strip the new health care law of funding even as registration for benefits opened Oct. 1 or, failing that, to win delays in putting the program into place.

The shutdown sent Republican poll ratings plunging, cost the government billions of dollars and damaged the nation’s international credibility. Mr. Obama refused to compromise, leaving Republican leaders to beg him to talk, and to fulminate when he refused.

Under the agreement to reopen the government, the House and Senate are directed to hold talks and reach accord by Dec. 13 on a long-term blueprint for tax and spending policies over the next decade. Mr. Obama said consistently through the standoff that he was willing to have a wide-ranging budget negotiation once the government was reopened and the debt limit raised.


      

Mr. Boehner and his leadership team had long felt that they needed to allow their restive conference to pitch a battle over the president’s health care law, a fight that had been brewing almost since the law was passed in 2010. Now, they hope the fever has broken, and they can negotiate on issues where they think they have the upper hand, like spending cuts and changes to entitlement programs.       

 

 

But there were no guarantees that Congress would
not be at loggerheads again by mid-January, and there is deep skepticism in both parties that Representative Paul D. Ryan of Wisconsin and Senator Patty Murray of Washington, who will lead the budget negotiations, can bridge the chasm between them.



 
 Wisconsin Republican Rep. Paul Ryan (L) and Washington Democratic Sen. Patty Murray will co-chair a new joint budget committee conference charged with finding a budget and spending solution by Dec. 13

Senator Mitch McConnell of Kentucky, the Republican leader who was instrumental in ending the crisis, stressed that under the deal he had negotiated with the majority leader, Senator Harry Reid of Nevada, the across-the-board budget cuts [the sequester cuts] extracted in the 2011 fiscal showdown remained in place over the objections of some Democrats, a slim reed that not even he claimed as a significant victory.

For Mr. Boehner, who had failed to unite his conference around a workable plan, Wednesday’s decision to take up the Senate bill proved surprisingly free of conflict. Hard-line Republican lawmakers largely rallied around the speaker. Mr. Boehner, they said, ...his conference found itself divided among three conflicting factions: moderate Republicans who were simply eager to reopen the government; those who opposed a provision that would have made members of Congress, White House officials and their staffs ineligible for government contributions to their health insurance on the new exchanges; and conservatives who felt the proposal did not go far enough in dismantling the health care law.

Conservatives in the House also remained skeptical that they would gain the upper hand in the near future. [They] said that with the president still unwilling to negotiate in good faith, he thought it was unlikely that Republicans would extract many concessions in any upcoming conference over the budget between the House and the Senate.
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 An aide brings a cart stacked with pizza to the office of Speaker John Boehner


GREG SARGENT WASHINGTON POST

Dems [hope]that the closer to the 2014 elections we get, the harder it will be for Republicans to stage another debt ceiling hostage crisis.

Democrats don’t want such a crisis. They would prefer that Republicans simply agree to extend the debt limit cleanly. But by pushing this [early] into the 2014 election season, they are giving themselves a kind of insurance policy that guarantees that if Republicans do stage another debt limit crisis, Republicans will pay a serious political price for it.

On the one hand, you’d think that this arrangement simply guarantees that the debt limit will hang over the next talks, meaning it will give Republicans leverage. ... But Democrats ...believe Republicans will have capitulated on the debt limit twice in a row — this time, and earlier this year — and that the political fallout from the current crisis has been so bad for Republicans that party establishment types will be eager to avoid the same thing happening again [in] 2014.

It’s true that those who will try to force another debt ceiling crisis are Tea Party conservatives who don’t much care about the overall political health of the GOP. But as this Democratic aide explains to me, this is precisely the point: More pressure from the right for yet another debt limit crisis close to the election will be even worse for the GOP, because it could again divide the party and potentially force 2014 GOP candidates (particularly those involved in primaries) to adopt an extreme position, damaging them for general elections.

“The effect of this fight has been to destroy the Republican brand and put their 2014 candidates behind the eight ball,” the aide tells me. “We are not trying to bait them into another fight. We’d rather put it past the election. But it’s really up to them. If they want to recommit political suicide  [eight] months before an election, that’s going to be their choice. We’re going to make sure that if this happens it has real consequences for them.”

And so, Dems are hoping that Republican leaders will have even more of an incentive next time to squash any demands from the right for another default hostage crisis. In this scenario, Dems effectively  neutralize the debt limit over the long term, in exchange for accepting sequester level spending into December (only one month longer than under a “clean CR,” which Dems were already prepared to accept). If that worked, it wouldn’t be a bad outcome. Or, if the debt limit isn’t neutralized and Republicans do stage another hostage crisis, the GOP again would devolve into chaos, again underscoring the party’s addiction to destructive, intransigent, crisis-to-crisis governing with only months before Election Day 2014.

That’s the idea, anyway.

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WASHINGTON POST

....despite what most see as a debacle for Republicans, a core group of conservatives insisted Tuesday that they are winning their battle to force concessions from Democrats on fiscal issues.

The president, they say, has been forced into a negotiation, even though he has said he will cede nothing in exchange for opening the government and raising the debt ceiling. The nation’s attention has been focused on problems with the health-care law. And, they say, making Boehner move to the right is itself a victory.

Rep. Andy Harris (R-Md.) said conservatives have succeeded in exposing problems with the health-care law.
“Oh my gosh, we’ve lit up Obama­care for the whole nation,” he said, describing what his wing of the party had won in the shutdown. “Look, the rollout was atrocious, this is a fundamentally flawed plan, and we have made it crystal-clear to the American public that we stand with them on Obamacare.”

That attitude illustrated a split within the GOP that has only grown more profound in the days since the shutdown started: Hard-liners are sure that their position is gaining strength, while moderates and a number of Republican leaders counter that the party has experienced an epic collapse.
“We didn’t get anything. This has been a total waste of time,” said Rep. Peter T. King (R-N.Y.), one of the most consistent critics of his party’s most conservative members.




MICHAEL TOMASKY DAILY BEAST

This is a sad and sickening spectacle,...Today, we have a clavern of sociopaths who know nothing of honor, and we have no easy way to stop them. Except at the ballot box. Except that they’ve rigged that, too, with their House districts. They’ve rigged the whole game so that they light the match and then point at President Obama and shout: “Look! Fire!”
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This is the worst it’s ever been in modern America. But it is going to get worse. They aren’t going to stop hating Obama and Obamacare. They aren’t suddenly going to decide to make their peace with him or it. They sure aren’t going to decide that gee, using default as leverage is naughty. A big chunk of them want the United States to default on Obama’s watch, so they can then blame him for what they themselves caused, say, “The black guy wrecked the economy. Couldn’t you have predicted it?” New horrors await us that you and I, being normal people, can’t begin to dream up. But rest assured, they will.

THE DEBT CEILING: WHAT'S AT STAKE

CBS NEWS

It is the economic calamity that no one expects and everyone fears.
Experts agree that failing to raise the nation's debt ceiling by Oct. 17, when U.S. officials say the government will run out of money to pay its bills, would gravely wound the economy, and perhaps even throw it back into recession. Because Treasury bonds and the dollar are cornerstones of the global financial system, meanwhile, the shock wave would be felt around the world.

"The potential is disastrous," said Gus Faucher, senior economist with PNC Financial Services Group. "We would see interest rates spike across the board. We'd see a huge crash in the dollar. People count on lending their money to the federal government and getting it back, and if that trust is taken away -- it's never happened that we haven't met our obligations as a nation -- then that has very, very negative consequences for the U.S. economy."
The consequences are so severe that, even as the government shutdown enters its second week, most seasoned political observers still expect Congress to ultimately reach an eleventh-hour deal to lift the government's borrowing limit.
But what exactly is the debt ceiling, and exactly how worried should Americans be that it could come crashing down?

The debt ceiling is the total amount of money the U.S. government can borrow (by selling Treasury bonds) to pay its obligations, including interest on the national debt, Social Security and Medicare benefits, and many other payments. That limit is currently $16.7 trillion, although technically the government already exceeded it in May. The Treasury Department has since used various measures to continue borrowing.
During World War I, amid uncertainty regarding the total costs of funding U.S. involvement in the conflict, Congress created the cap in 1917 to put an upper limit on federal borrowing. Since 1960, Congress has raised the debt ceiling 78 times.



How is the debt ceiling changed?
Lawmakers can adjust it by passing a standalone bill or by including it in another piece of legislation as an amendment.

Does raising the debt ceiling increase the federal debt?
No. Lifting the borrowing limit simply allows the government to pay its existing bills. That debt exists whether or not Congress authorizes additional borrowing, and to avoid default it must be paid.

Why can't Congress and the White House avoid lifting the cap by cutting federal spending?
Because preventing the government from borrowing to meet its obligations would require all discretionary spending, such as for defense, education, housing and other annual appropriations, to stop, according to the Congressional Research Service. Most of the outlays for mandatory programs, such as Social Security, also would have to be halted, while taxes would need to rise to ensure the government had money to spend. Deep spending cuts and tax hikes would throw the economy into recession.


Jacob Lew

Treasury Secretary Jacob Lew recently forecast that on Oct. 17 the government would have about $30 billion on hand. That isn't enough because the government spends as much as $60 billion per day. "If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history," he said last week in a letter to congressional leaders.

What happens if Congress doesn't raise the debt ceiling?
If the government runs low on cash, it will have to withhold a range of payments. Retirees might not get their Social Security checks, especially worrisome for the millions of Americans who depend almost entirely on the social insurance program for income. The same goes for Medicare and Medicaid recipients. Holders of Treasury notes, from Wall Street and other global banks to foreign governments, also could get stiffed, jeopardizing the solvency of many financial institutions and choking off global credit flows.

The U.S. also would struggle to pay the interest on its debt, including a $6 billion payout due at the end of the month. At that point, the U.S. would be in default of its obligations. The value of Treasury bonds and the dollar would nosedive. The nation's borrowing costs would soar as anxious investors demanded a higher return to buy suddenly shaky U.S. debt. And because the interest rate on Treasuries provides a benchmark for rates on other loans, from mortgages and credit cards to car and student loans, borrowing would become far more costly for consumers and businesses. Stock markets in the U.S. and elsewhere around the world would almost certainly plunge.
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....Consumer confidence plummeted after lawmakers squared off over the debt ceiling in the summer of 2011, while the Standard & Poor's 500 stock index dropped nearly 20 percent. Hiring among small businesses slowed. Ever after a deal was struck to raise the cap in August of that year, credit rating agency Standard & Poor's downgraded U.S. debt for the first time ever.

Beyond the immediate economic fallout of defaulting on its debt, for the U.S. the symbolic blow might be even greater. In the post-World War II era, Treasuries and the greenback have -- for better and for worse -- served as the foundation of the global financial system. A default would shatter the faith on which that system relies.



How much danger are we in?
Although financial markets are not yet in panic mode, the standoff in Washington has them worried. Unlike during the 2011 dispute, when Republicans and most Democrats favored cutting federal spending, the stark division over Obamacare suggests there may be less room for compromise this time around. One clear sign of distress: Interest rates on short-term Treasury bonds rose last week, as investors seek greater yields to offset what they perceive as the greater risk of holding the debt.

Still, most economists, stock analysts and, for all the pointed rhetoric on Capitol Hill, even congressional leaders themselves downplay the chances of a default. The belief is that common sense, or at least a sense of political self-preservation, will prevail.




THE HILL

Under the prioritization option, Treasury theoretically could chose some to make payments, such as to Social Security recipients, but forgo others such as refunds to taxpayers or pay for federal workers.

Treasury officials have said prioritization is technically unworkable when applied to non-bond payments, the group noted.

Under a delay scenario, Medicare and Medicaid payments could be pushed back from Oct. 18 to Oct. 21, for example, when more revenue comes in. Social Security checks set for Nov. 1 could be delayed until Nov. 13, leaving seniors without money for half a month.

BPC said that under this option, the delays would become longer and longer until at some point payments would have to be missed.

Hoagland said that Social Security recipients could sue the government over the delay and could likely win a judgment since the benefits are legally considered entitlements.

In either case, delays or missed payments would be seen as some type of default, BPC warned. They said there is no conceivable way the real deadline is in December or January, as some in Congress appear to believe.

No Deal, But GOP Offers Plan For 6 Wk Extension of Debt Ceiling

N.Y. TIMES

President Obama and House Republicans failed to reach agreement on a six-week extension of the nation’s borrowing authority during a meeting Thursday at the White House, but the two sides kept talking, and the offer from politically besieged Republicans was seen as an initial step toward ending the budget standoff.

In statements afterward that struck the most positive tone in weeks of acrimony, House Republicans described their hour-and-a-half-long meeting with Mr. Obama as “a useful and productive conversation,” while the White House described “a good meeting,” though “no specific determination was made” about the Republicans’ offer. Both agreed to continue talks through the night.

People familiar with the meeting said that Mr. Obama pressed Republicans to reopen the government, and that Republicans raised the possibility that financing could be restored by early next week if terms for broad budget negotiations could be reached.

 

Twenty Republicans, led by Speaker John A. Boehner, went to the White House at Mr. Obama’s invitation after a day of fine-tuning their proposal to increase the Treasury Department’s authority to borrow money to pay existing obligations through Nov. 22. The government is expected to reach its borrowing limit next week. In exchange, they sought a commitment by the president to negotiate a deal for long-term deficit reduction and a tax overhaul.

 

The House Republican offer represented a potentially significant breakthrough. Even if Democrats found fault with the Republicans’ immediate proposal — for example, it would prevent the Treasury secretary from engaging in accounting maneuvers to stave off potential default — it was seen as an opening gambit in the legislative dance toward some resolution before the government is expected to breach its debt limit on Thursday.

Even before the meeting, the White House and its Democratic allies in Congress were all but declaring victory at the evidence that Republicans — suffering the most in polls, and pressured by business allies and donors not to provoke a government default — were seeking a way out of the impasse.

 

 

For House Republicans, the maneuvers represented a near-reversal of their original strategy in September of going to the mat over the debt limit but not shutting down the government. Now, under pressure from falling poll numbers and angry business supporters, they are seeking a compromise on the debt ceiling. Yet for now, they are still refusing to finance and reopen the government without some concessions.

Mr. Boehner and his colleagues left the White House without speaking to waiting reporters, and quickly gathered in his Capitol suite for further discussion. Their debt limit proposal could come to a vote as soon as Friday.

Before the White House meeting, administration and Congressional Democrats said they were skeptical that House Republican leaders could pass the proposal. A large faction of Tea Party conservatives campaigned on promises never to vote to increase the nation’s debt limit. And Congressional Democrats vowed to oppose any proposal that did not also fully finance a government now shuttered since the fiscal year began Oct. 1.

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Many House Republicans, leaving a closed-door party caucus earlier Thursday that at times grew contentious, said they would support their leadership’s short-term debt limit proposal. But they said they would do so only if Mr. Obama agreed to negotiate a broader deficit reduction deal, with big savings from entitlement programs.

The president has insisted he will not agree to significant reductions in projected Medicare and Medicaid spending — even his own tentative proposals — unless Republicans agree to raise revenues by curbing tax breaks for corporations and wealthy individuals. And Mr. Boehner in recent days reaffirmed the party’s anti-tax stance, which suggests that future talks could founder.

 

 

THE SHUTDOWN & DEBT CEILING: CRACKS I/T PAVEMENT?

N.Y. TIMES

House Republicans, increasingly isolated from even some of their strongest supporters more than a week into a government shutdown, began to consider a path out of the fiscal impasse that would raise the debt ceiling for a few weeks as they press for a broader deficit reduction deal.

That approach could possibly set aside the fight over the new health care law, which prompted the shutdown and which some Republicans will be reluctant to abandon.

In a meeting with the most ardent House conservatives, Representative Paul D. Ryan of Wisconsin, the chairman of the House Budget Committee, laid out a package focused on an overhaul of Medicare and a path toward a comprehensive simplification of the tax code.

“We’re more in the ideas stage right now,” said Representative Jack Kingston, Republican of Georgia and a senior member of the Appropriations Committee. “There is a developing consensus that this is a lot bigger than an Obamacare discussion.”

 

At the same time, Congressional leaders from both parties began some preliminary discussions aimed at reopening the government and raising the statutory borrowing limit. And President Obama, who invited House Democrats on Wednesday, asked all House Republicans to the White House on Thursday, an invitation Speaker John A. Boehner whittled down to a short list of attendees he wants to negotiate a compromise.

Democrats showed their own cracks. Twenty-six House Democrats planned to attend a bipartisan event on Thursday morning with the group No Labels, calling for negotiations to start immediately, a challenge to the president and to Democratic leaders who say they will not negotiate until the government reopens and the debt ceiling is lifted.

In the meeting with House Democrats on Wednesday evening, Mr. Obama held firm to his stated intention to negotiate with Republicans only after the government is reopened and the debt ceiling is raised. He told Democrats that if he gives in now, Republican demands would be endless. “The only thing not on their list is my own resignation,” he told Democrats, according to a lawmaker in the room.

With the impact of the shutdown starting to intensify, House Republicans were taking criticism from some of their longtime backers. Business groups demanded the immediate reopening of the government, and benefactors like Koch Industries publicly distanced themselves from the shutdown fight.

Republicans acknowledged the pressure is mounting on them. On Wednesday, the National Retail Federation joined other reliably Republican business groups like the U.S. Chamber of Commerce and the National Association of Manufacturers in asking House Republicans to relent.

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Members suggested they could get behind a lifting of the debt ceiling for several weeks to allow Republicans to unite around a deficit reduction and tax overhaul package.

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But, [the conservative Republican Study Committee leader, Representative Steve Scalise, Republican of Louisiana ] said, even that should have spending cuts attached. He also said that a debt-ceiling increase of even three weeks should include a measure passed by the House denying federal subsidies to congressmen, White House officials and their staff members, who already must buy health insurance on the Affordable Care Act’s new exchanges. And, he suggested, conservatives might insist on another House bill that would allow the Treasury to borrow enough money to pay off debts as they become due, taking away the threat of a government default.

All of those measures would be stiffly resisted by Senate Democrats and the White House.

 

Still, lawmakers did appear to be looking for a way forward after days of simply staring at one another....Mr. Obama invited all House Republicans to a get-together on Thursday. Mr. Boehner saw a meeting between the president and 232 Republicans as a photo opportunity with no chance of producing substantive discussions. So he reduced the invitation list to 18. That will at least give the appearance of negotiations if it fails to prompt actual substantive talks.

THE SHUTDOWN ENTERS ITS SECOND WEEK

GREG SARGENT WASHINGTON POST

With the government shutdown dragging into Week Two, and the debt limit deadline creeping closer, Republicans continue to insist the cause of our current governing crisis is that Obama and Democrats refuse to negotiate with them. On ABC News yesterday, John Boehner repeated this talking point again and again.
Yet in the process, Boehner revealed what this invitation to “negotiate” really means. He implicitly confirmed Republicans will only negotiate in a context in which Republicans can employ the looming threat of disaster for the country as a way to unilaterally increase their leverage, and will not negotiate without being granted this leverage. Here’s the key exchange, with ABC’s George Stephanopoulos:

STEPHANOPOULOS: The Democrats, including Senate Democrat Harry Reid, has said he’s more than willing to have a conference, more than willing to have a negotiation, but not under the threat of a government shutdown, not under the threat of a default.

BOEHNER:  So it’s my way or the highway.  That’s what he’s saying.  Complete surrender and then we’ll talk to you.

This is an extremely important and revealing moment. Boehner is explicitly saying that the Democrats’ refusal to negotiate in a context where the threat of widespread harm to the country gives Republicans leverage – and their insistence on negotiating outside this context — represents a demand for ”complete surrender” by Republicans, and hence is a non-starter. But in this scenario, Republicans would not be giving up anything, other than the very leverage Republicans presume the threat of widespread harm to the country grants them. For Republicans, agreeing to negotiate without this unilateral leverage would itself be surrender!
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Stephanopoulos also asked Boehner what concessions Republicans would be willing to make in this “negotiation” he’s requesting. Boehner couldn’t name any, and indeed, he even ruled out conceding anything on new revenues.....[In effect, Boehner is] saying Republicans will make no concessions of their own...

Some will argue that agreeing to raise the debt limit constitutes a “concession” on the part of at least some conservative Republicans. But why is it a concession if Boehner concedes it must happen to avert widespread disaster for the country? As Boehner himself admits, it is the giving up of presumed leverage itself that constitutes surrender for Republicans. He’s insisting on this leverage as a condition for any negotiations.



REPUBLICANS FLOAT SHORT TERM SOLUTION TO CRISIS: It’s being reported that some Republicans are floating the idea of a six-week extension and funding of the government, during which time both sides could sit down and negotiate a longer term solution. The Post’s big write up has the key detail:

Among the options: A short-term suspension, perhaps no longer than six weeks, designed to force Obama to the bargaining table. But some Republicans argue that even a short-term suspension should come with strings attached.

Yup — even this escape hatch for Republicans must include unilateral concessions by Dems. More broadly, it’s unclear why a temporary extension would solve the problem — Dems would still be negotiating under threat of widespread harm to the country later.
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MEMBERS OF BOTH PARTIES CONTRADICT BOEHNER: The House Speaker continued to insist this weekend that a “clean CR” funding the government can’t pass the House, but members of both parties are contradicting him, including Dem Chuck Schumer and GOP Rep. Peter King, who said:

“If it went on the floor tomorrow, I could see anywhere from 50 to 75 Republicans voting for it. And if it were a secret ballot, 150.”

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 COULD A CLEAN DEBT CEILING PASS CONGRESS? Republicans continue to insist a clean debt limit could never pass the House, and David Drucker reports that Republicans are now claiming it would “never” pass the Senate:...Really? There wouldn’t be six GOP Senators willing to support raising the debt limit if default loomed? I’m skeptical, but at any rate, you’ll be hearing a lot of this in the days ahead. Might be worth putting GOP Senators on record here.

[Reports that Senate Republicans would consider supporting such a bill began to roll in on Monday.
Sens. Mark Kirk (R-Ill.), John McCain (R-Ariz.) and Lisa Murkowski (R-Alaska) have all floated the idea of voting for a clean debt limit increase, according to reports by Politico, ABC News and Public Radio International:]



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Paul Krugman suggests Republicans have now found themselves with their backs to the wall on the debt limit because they were too incompetent to realize that Obama would have no choice but to refuse to negotiate, and to turn that into a matter of principle. And this continues to be cast as a “both sides to blame” story:

How did this happen? The main answer, which only the most pathologically “balanced” reporting can deny, is the radicalization of the Republican Party….Everybody not inside the bubble realizes that Mr. Obama can’t and won’t negotiate under the threat that the House will blow up the economy if he doesn’t — any concession at all would legitimize extortion as a routine part of politics.

The continued treatment of this as a conventional Washington negotiation, I’d argue, is a symptom of a broader refusal to reckon with the reality of what today’s GOP has become.

* THE DELUSION DRIVING THE GOVERNMENT SHUTDOWN BRIGADE: E.J. Dionne gets this exactly right: The whole quest to use this fall’s fiscal fights as leverage to undermine Obamacare is “premised on the delusion that Obama’s election victories were meaningless.” Indeed, it’s driven by the refusal of many Republicans to come to terms with the fact that they no longer have the leverage they enjoyed in 2011.




 * AND IS TEA PARTY FATIGUE SETTING IN? The Post has a great piece detailing that at least four Tea Party Republicans are now facing primaries from challengers who say it’s time for less of a slash and burn approach to governing, a reversal of the situation in which primaries all came from the right. Here’s the motive behind the challenge to Rep. Justin Amash:

Some business leaders are recruiting a Republican primary challenger who they hope will serve the old-fashioned way — by working the inside game and playing nice to gain influence and solve problems for the district. They are tired of tea party governance, as exemplified by the budget fight that led to the shutdown and threatens a first-ever U.S. credit default.

Wait, so GOP candidates are running on a promise to govern constructively, rather than engage in endless sabotage governing? Should be an interesting experiment.

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Over the weekend, National Review’s Robert Costa reported that Republicans are talking about a package of modest demands to end the government shutdown and raise the debt limit — including a mechanism for revenue-neutral tax reform, small entitlement reforms and minor changes to Obamacare (such as repeal of the medical-device tax, a measure that enjoys bipartisan support).

The fiscal showdown seems likely to extend at least until mid-October and could consume Washington all the way through December if a short-term continuing resolution is signed.

It's Govt Shutdown Threat Time Again.

GREG SARGENT WASHINGTON POST

It continues to go overlooked in the Beltway argument over Obamacare, but one of the most fundamental factors shaping the politics of all of this is that disapproval of the Affordable Care Act does not necessarily translate into support for Republican efforts to undermine or sabotage the law.
Republicans and conservatives constantly justify either their repeated votes to repeal the law, or their threats of destructive confrontations to defund or delay it, by citing public dissatisfaction with it as proof the public supports their efforts. Yet there’s little to no polling evidence to suggest one translates into support for the other. Indeed, there’s evidence the opposite is true.
Today’s new Pew Research poll again drives this home with striking clarity. It finds 53 percent of Americans disapprove of the Affordable Care Act, versus only 42 percent who approve. This mirrors a new NBC/WSJ poll finding pluralities think the law is a bad idea and will be more damaging than not. No question: Obamacare polls terribly.

But the Pew poll finds something else that’s just as important: There’s virtually no public support for efforts to undermine the law:

The 53% of the public who disapprove of the law are divided over what they would like elected officials who oppose the law to do now that the law has begun to take effect. About half of disapprovers (27% of the public overall) say these lawmakers “should do what they can to make the law work as well as possible,” but nearly as many (23% of the public) say these officials “should do what they can to make the law fail.”

Yet it is this small minority that is largely shaping the contours of the GOP posture heading into this fall’s fiscal fights. The more “moderate” and “reasonable” Republican position — the one held by GOP leaders — is that there should be no government shutdown to defund Obamacare; that an effort to delay Obamacare should be tied somehow to the debt limit fight; and that Republicans should keep working to repeal the law. Yet even this position represents an effort to placate a small minority of the American people. Republicans are caught in a struggle between two arguments that both are designed, to varying degrees, to minister to this small minority’s obsession.
Meanwhile, large majorities overall either support the law or oppose it but want lawmakers to try to make it work. Simply put, the zeal to prevent the law from functioning as well as possible is well outside the American mainstream. To some degree this mirrors the situation within the House of Representatives itself. A majority of Members would vote tomorrow to fund the government without any defund-Obamacare rider attached, or to raise the debt limit without any Obamacare delay attached. But because House GOP leaders are loathe to allow a vote on anything unless a majority of House Republicans approves of it, the result is that — if today’s Pew poll has it right — the delusional preoccupations of a small minority of the American people are having an outsized
 impact on, well, our entire political situation, with potential economic chaos looming as a result.
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 SEAN SULLIVAN WASHINGTON POST

Stop us if you’ve heard this one before: House Republican leaders craft a legislative plan they think can win passage, only to be rebuffed by conservative members expressing outrage at the idea. Then, it’s back to the drawing board.

GOP leadership was forced to put off a vote on a plan offered by Majority Leader Eric Cantor (R-Va.) because it lacked sufficient support from Republicans. The proposal would fund the government through mid-December and contains a provision to defund Obamcare.
But the Democratic-controlled Senate could vote down the Obamacare provision and send the rest of it on to the president for his approval. That alienated enough House Republicans to delay the vote and send leaders, well, back to the drawing board in search of a workable deal.
But what’s workable depends upon whom you ask. Some conservatives see the fall fiscal debates as the last best chance to shred Obamacare. And they’re willing to do it at all costs, even if it means temporarily shuttering the government, which would be the result of passing something the president won’t sign.

A new CNN/ORC International poll shows that 51 percent of Americans say Republicans in Congress would be more responsible for a shutdown, compared to just 33 percent who would hold Obama more accountable. As the face of the Republican Party on Capitol Hill, it’s not hard to see why Boehner wants to avoid that scenario.

With the GOP Conference split into factions, key fiscal deadlines looming, and no obvious long-term remedies for the deep divisions, the question is this: How long will leadership continue down the path it is on, trying time and again to walk the fine line between satisfying the political right and coming up with legislation that can pass Congress?
The answer is probably the foreseeable future, because the alternatives look even worse for Boehner.

Boehner could also try to pass legislation with moderate Republican support and the backing of most Democrats. But such a move would trigger an outright revolt among House Republicans degrees more severe that what the speaker currently faces.
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JONATHAN BERNSTEIN WASHINGTON POST

Barack Obama pledged again that he “will not negotiate over the full faith and credit of the United States” — that is, over the debt limit. Remember that until Republicans took control of the House in 2011, the debt limit had never been used to force significant substantive changes — because, after all, both sides ultimately support raising the debt limit, so it’s a lousy negotiating chip. On the other hand, it’s long been accepted that the debt limit vote is one that Members of Congress don’t like to take, and so finding some symbolic fig leaf (or bundling it with other legislation) does have a long history.

However, Noam Scheiber makes the case, in a piece generating some chatter today, for why there will be a government shutdown this time. His basic take is that Obama has every incentive to hold the line even if it results in a shutdown, because he no longer has to worry about reelection and the hit to the economy a shutdown it would entail. Scheiber also says John Boehner might have an incentive to allow a shutdown — in order to jar conservative Republicans to their senses and force them to accept the reality of their own limited negotiating leverage.
But make no mistake, the incentives are still heavily for Boehner to cut a deal and avoid a shutdown at all costs.

It’s true that the big change since 2011 and 2012 is that the president, without an upcoming election, is probably more inclined to take the short-term economic hit that a shutdown would cause. On the other hand, while Boehner has been a pretty good Speaker and has successfully helped Republicans avoid their worst impulses, I don’t really agree that this time Boehner’s incentive is to accept a shutdown.
Why? Because the key think to know about a shutdown is that it will end. Maybe after a day; maybe after a month. It will end, and it will end with something that both Boehner (and mainstream conservatives) and Obama (and mainstream liberals) can live with. And at that point, there is nothing more certain in this world than that radical “conservatives” will believe that if only Boehner  and Congressional Republicans had held out a little while longer, Obama would have surrendered and Republicans would have won a total victory.

So a shutdown (or a debt limit breach) has to end with Boehner (supposedly) selling out conservatives, and doing it with far more press coverage and attention than he would get from (again, supposedly) selling them out before a shutdown by cutting a deal. That’s a disaster for him — and, on the other side of the Capitol, for Mitch McConnell — and one he’ll work hard to avoid.

Between Obama being more likely to fight through a shutdown, and more Republicans in Congress who don’t remember 1995-1996, it’s certainly very possible that a shutdown is coming. Or even a debt limit breach. But it’s absolutely in Boehner’s interests to do all he can to avoid either. If either happens, it will be only because Boehner struggled but failed to avert such an outcome. Bottom line: Expect Barack Obama to be a tougher negotiator this time around and expect Boehner to do all he can to cut a deal to avoid disaster.