Story Summary

Government shutdown

Let’s start with the obvious question: Will the government shut down this week? Most likely.

Republicans and Democrats can agree on that. It’s everything else that has them bickering and blaming. And unless they strike a deal on a spending bill Monday, the government will begin closing shop at 12:01 a.m. Tuesday.

GOVERNMENT SHUTDOWN: GET UP TO SPEED IN 20 QUESTIONS

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By Paul Steinhauser, CNN Political Editor

The number of Americans who say the economy is in good shape has dropped to the lowest level of the year, according to a new national poll.

And a CNN/ORC International survey also indicates that economic pessimism is growing in the wake of the government shutdown, with nearly six in 10 forecasting poor economic conditions a year from now.

The poll’s Tuesday morning release comes a few hours before the Labor Department announces the September unemployment report. The release of last month’s jobless figures was delayed because of the 16-day partial government shutdown.

In the poll that was conducted this past weekend, 71% of those questioned say that economic conditions are poor right now, with only 29% saying that current conditions are good — a drop of 4 percentage points since late September, just before the shutdown began.

“That number has not been particularly high in 2013, but throughout the year it has always been over 30%, making the current level of 29% the worst number since December of last year,” says CNN Polling Director Keating Holland.

Only 40% say that the economy will be in good shape a year from now. That’s down from 50% in June and represents the lowest level of optimism since October 2011. Some 59% say the economy will be in poor shape next fall.

The poll was conducted for CNN by ORC International October 18-20, with 841 adults nationwide questioned by telephone. The survey’s overall sampling error is plus or minus 3.5 percentage points.

TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

By Tom Cohen. Holly Yan and Greg Botelho, CNN

President Barack Obama said Thursday there were “no winners” in the deal that ended the 16-day government shutdown and averted a possible U.S. default, then challenged Republican conservatives to drop their anti-government ideology and change how business gets done in Washington.

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In a tough and somber statement hours after signing legislation passed by Congress to reopen the government, Obama said the standoff “inflicted completely unnecessary damage (to) our economy” by slowing growth and increasing borrowing costs.

“There are no winners here,” Obama said before blaming the brinksmanship that flirted with the first default in U.S. history on no-compromise tactics of the Republican tea party wing in Congress.

“The American people are completely fed up with Washington,” he said, reflecting polls that show support for Congress at historic lows.

Decrying “another self-inflicted crisis,” Obama said there was “no economic rationale for all of this,” taking aim at conservatives who he said pushed for the shutdown on grounds they were doing it to save the American economy.

Instead, the president argued, the political brinksmanship of the Republican right that manufactured crisis caused the most pain.

He repeated his call for Congress to now take a “balanced approach” on a budget for the rest of the current fiscal year that would “cut out things we don’t need,” “close corporate tax loopholes that don’t create jobs,” and “free up resources for things that do help the country grow,” like research and infrastructure.

“Let’s work together to make government work better instead of treating it like an enemy or purposely making it work worse,” the President said in a direct jab at tea party conservatives.

“You don’t like a particular policy or a particular president, then argue for your position. Go out there and win an election,” he said, adding “push to change it, but don’t break it” because “that’s not being faithful to what this country’s about.”

He ended by saying “we can’t degenerate into hatred” and quoting part of the Pledge of Allegiance that states America is “one nation, under God, indivisible, with liberty and justice for all.’

Back to work

The partial government shutdown and standoff over the debt ceiling ended late Wednesday night when Congress voted on a temporary funding bill that also raised the nation’s borrowing limit.

Before Obama spoke, federal employees returned to work Thursday to mini coffee cakes from the Vice President and hugs from colleagues, along with eye rolls about their “vacation” due to the partial government shutdown.

The workers streamed into government offices in Washington and opened national landmarks such as the Gateway Arch in St. Louis that had been closed during the shutdown that started on October 1.

Obama paid tribute to those who worked without pay during the shutdown or were furloughed because of the political imbroglio, saying: “Thanks for your service. Welcome back. What you do is important.”

The congressional stalemate ended when Republicans caved to the insistence of Obama and Democrats that legislation funding the government and raising the federal borrowing limit should be free — or at least mostly free — from partisan issues and tactics.

After all the bickering and grandstanding, the billions lost and trust squandered, the result amounted to much ado about nothing.

“I am happy it’s ended,” Vice President Joe Biden said when he arrived at the Environmental Protection Agency with the cakes handed out to returning workers. “It was unnecessary to begin with. I’m happy it’s ended.”

In the basement of the Capitol, there were exuberant hugs as furloughed colleagues were welcomed back, but there was also bitterness toward the elected legislators in charge upstairs.

A common refrain was the sarcastic question: “How was your vacation?” Responses were often nonverbal — an eye roll, a head shake, an angry glare, the occasional ironic laugh.

Kicking the can

The agreement to end the shutdown and avert a potential government default came Wednesday from Senate leaders after House Republicans were unable to get their own caucus to support a GOP proposal.

Hardline Republicans, whose opposition to Obama’s signature health care reforms set the shutdown and debt ceiling crisis in motion, got pretty much zip — except maybe marred reputations.

“To say we as Republicans left a lot on the table would be one of the biggest understatements in American political history,” Republican Sen. Lindsey Graham of South Carolina tweeted.

However, it all amounts to the cliched kicking of the can down the road, because the deal passed by Congress in lightning fashion Wednesday night and signed by Obama in the wee hours of Thursday only funds the government through January 15 and raises the debt ceiling until February 7.

The agreement set up budget negotiations between the GOP-led House and Democratic-led Senate intended to reach a broader agreement on funding the government for the fiscal year that ends on September 30.

Ideally, a budget compromise would ensure government funding and include deficit reduction provisions that would prevent another round of default-threatening brinksmanship in three months’ time.

On Thursday, leaders of the House and Senate budget committees — Republican Rep. Paul Ryan of Wisconsin and Democratic Sen. Patty Murray of Washington — held a symbolic breakfast to get the dialogue started.

They noted that their negotiations — called a conference between their two committees to work out differences in budgets passed by each chamber — differed from a special committee set up under 2011 legislation that failed to agree on broader deficit reduction steps.

“Chairman Ryan knows I’m not gonna vote for his budget. I know that he’s not gonna vote for mine,” Murray told reporters, saying the goal was to find “the common ground between our two budgets that we both can vote on.”

Last-minute save

Everything came together Wednesday on a frenzied night of deadline deals.

The Senate brokered a bill to end the shutdown and raise the debt limit, then passed with broad bipartisan support.

The GOP-led House also passed it, with about 80 Republicans joining a unified Democratic caucus in support, while well over 100 House Republicans voted “no.”

Had Congress not approved a debt limit increase, the government would have lost its authority to borrow more money to pay all of its bills. Social Security checks and veterans’ benefits could have stopped. The markets could have gone into a tailspin.

Approval of the temporary spending plan meant the return to work of more than 800,000 furloughed employees, while more than 1 million others who’ve been working without pay will get paychecks again.

A provision in the agreement guaranteed back pay for government workers for the shutdown.

However, the measure doesn’t address many of the contentious and complicated issues that continue to divide Democrats and Republicans, such as changes to entitlement programs and tax reform.

“We think that we’ll be back here in January debating the same issues,” John Chambers, managing director of Standard and Poor’s rating service, told CNN on Wednesday night. “This is, I fear, a permanent feature of our budgetary process.”

A $24 billion battle

The partial government shutdown came at a steep cost. Standard and Poor’s estimated it took a $24 billion bite out of the economy.

Then there’s the impact it had on politicians’ image. If there’s one thing polls showed that Americans agreed on, it’s that they don’t trust Congress — with Republicans bearing more blame than anyone else for what transpired.

Both sides kept talking past each other, with Republicans insisting for a time that defunding, delaying or otherwise altering Obamacare must be part of any final deal.

Democrats, meanwhile, stood firm in insisting they’d negotiate — but only after the passage of a spending bill and legislation to raise the debt without anti-Obamacare add-ons.

In the end, Democrats largely got what they wanted after some last-minute talks by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell.

McConnell said any upcoming spending deal should adhere to caps set in a 2011 law that included the forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

Republicans did get a small Obamacare concession: requiring the government to confirm the eligibility of people receiving federal subsidies under the health care program.

While some Republicans, such as tea party favorite Sen. Ted Cruz of Texas, claimed moral victories in energizing their movement, House Speaker John Boehner didn’t even pretend his side came out victorious.

“We fought the good fight; we just didn’t win,” he told a radio station in his home state of Ohio.

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would have dismantled or defunded Obamacare.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was virtually no chance they ever would have succeeded.

Republican Sen. Kelly Ayotte of New Hampshire called the House GOP tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

Wall Street welcomed the news of a deal on Wednesday as stocks rose sharply. But it was back to business on Thursday with concerns over business fundamentals pushing the market lower.

Never again’

The Senate’s Democratic leader said he never wants to go through the recent turmoil again.

“Let’s be honest: This was pain inflicted on our nation for no good reason, and we cannot make — we cannot, cannot make — the same mistake again,” Reid said Wednesday.

But former House Speaker Newt Gingrich predicts the tea party and staunch conservatives in the GOP will be more energized after not getting the anti-Obamacare amendments they wanted.

“They will be more embittered, more angry. They will find more ways to go after Obama because they can’t find any way to get him to negotiate,” he said, adding that he expects Obamacare to become the defining issue of the next two elections cycles.

As Obama walked away from a news conference Wednesday night, he was asked whether he thought America would be going through this brouhaha again in a few months.

His answer: “No.”

We’ll see.

CNN’s Brianna Keilar, Deirdre Walsh, Dana Bash, Erin McPike, Steve Brusk, Eliott C. McLaughlin, Paul Steinhauser, Ashley Killough, Craig Broffman, Jim Acosta, Mark Preston, Dan Merica and Lisa Desjardins contributed to this report.

TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

By Holly Yan, Tom Cohen and Greg Botelho, CNN

After all the bickering and grandstanding, the billions lost and trust squandered, it was much ado about nothing

The partial government shutdown’s finally over. The debt ceiling debacle has been averted. Obamacare remains virtually unscathed.

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The hardline House Republicans, whose opposition to the President’s signature healthcare law set this all in motion, got pretty much zip — except maybe their reputations marred.

“To say we as Republicans left a lot on the table would be one of the biggest understatements in American political history,” Republican Sen. Lindsey Graham of South Carolina tweeted.

But it’s all temporary — the cliched kicking of the can. In a few months, Congress will come back to fight the same battles.

For now, though, thousands of furloughed federal workers will return to work Thursday, the U.S. can pay its bills, and an economic superpower can again boast a functioning government.

Pundits will conduct a post-mortem of the bitter stalemate. And the public will look ahead to what’s next.

Last-minute save

Everything came together Wednesday on a frenzied night of deadline deals. Lawmakers toiled through the night, coming precariously close to hitting the midnight debt ceiling deadline.

The Senate brokered a bill to end the 16-day-long shutdown and raise the debt limit. The GOP-led House passed it. And early Thursday morning, President Barack Obama signed it into law.

But it wasn’t Republicans who made it happen; a majority of that party’s caucus actually voted against the measure, which only passed because of overwhelming Democratic support.

Had Congress not approved a debt limit increase, the government would have started running out of money to pay its bills. Social Security checks and veterans’ benefits could have stopped. The markets could have gone into a tailspin.

And now that Congress has approved a temporary spending plan, the government can re-emerge from its partial shutdown. More than 800,000 furloughed employees can start coming back to work. More than 1 million others who’ve been working without pay will see paychecks again.

Federal workers should expect to return to work Thursday morning, the Office of Management and Budget said.

A temporary bandage

The country will now be funded through January 15, and the debt cushion has been extended through February 7.

But there are clues the country will go through this mess again.

The bill that passed Wednesday night doesn’t address many of the contentious and complicated issues that continue to divide Democrats and Republicans, such as changes to entitlement programs to tax reform.

“We think that we’ll be back here in January debating the same issues,” John Chambers, managing director of Standard and Poor’s rating service, told CNN on Wednesday night. “This is, I fear, a permanent feature of our budgetary process.”

For what it’s worth, the heads of the Senate and House budget committees — Democratic Sen. Patty Murray of Washington and GOP Rep. Paul Ryan of Wisconsin — will meet Thursday to try to tackle these budget divides. They’ll head budget negotiations intended to come up with a broader spending plan for the rest of fiscal year 2014, which ends on September 30.

But Obama said he’s not in the mood for more of the same, saying politicians have to “get out of the habit of governing by crisis.”

“Hopefully, next time, it will not be in the 11th hour,” he told reporters, calling for both parties to work together on a budget, immigration reform and other issues.

A $24 billion battle

The partial government shutdown that lasted 16 days has come at a steep cost. Standard and Poor’s estimated it took a $24 billion bite out of the economy.

Then there’s the impact it had on politicians’ image. If there’s one thing polls showed Americans agreed on, it’s that they don’t trust Congress — with Republicans bearing more blame than anyone else for what transpired.

Both sides kept talking past each other, with Republicans insisting for a time that defunding, delaying or otherwise altering Obamacare must be part of any final deal. Democrats, meanwhile, stood firm in insisting they’d negotiate — but only after the passage of a spending bill and legislation to raise the debt without anti-Obamacare add-ons.

In the end, Democrats largely got what they wanted after some last-minute talks by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell.

Reid hailed the agreement he worked out with McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.”

McConnell said any upcoming spending deal should adhere to caps set in a 2011 law that included forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

Republicans did get a small Obamacare concession: requiring the government to confirm the eligibility of people receiving federal subsidies under the health care program.

While some Republicans, such as tea party favorite Sen. Ted Cruz, claimed moral victories in energizing their movement, House Speaker John Boehner didn’t even pretend his side came out victorious.

“We fought the good fight; we just didn’t win,” Boehner told a radio station in his home state of Ohio.

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would dismantle or defund Obamacare.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was virtually no chance they ever would have succeeded.

Republican Sen. Kelly Ayotte of New Hampshire called the House GOP tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

Markets mixed after agreement

Wall Street sighed with relief. U.S. stocks rose Wednesday on the news of an agreement. The benchmark Dow Jones Industrial Average jumped more than 200 points on the day.

But world markets had a tepid reaction Thursday, with markets mixed in Asia.

“The U.S. is the largest economic power in the world, it’s not just about its own interest, but also affects the world economic stability,” the Chinese foreign ministry said. “China welcomes the progress and development of resolving the matter.”

What’s next

The Senate’s Democratic leader said he never wants to go through the recent turmoil ever again.

“Let’s be honest: This was pain inflicted on our nation for no good reason, and we cannot make — we cannot, cannot make — the same mistake again,” Reid said Wednesday.

But former House Speaker Newt Gingrich predicts tea party and staunch conservatives in the GOP will be more energized after not getting the anti-Obamacare amendments they wanted.

“They will be more embittered, more angry. They will find more ways to go after Obama because they can’t find any way to get him to negotiate,” he said, adding that he expects Obamacare to become the defining issue of the next two elections cycles.

As Obama walked away from a press conference Wednesday night, he was asked whether he thought America would be going through this brouhaha again in a few months.

His answer: “No.”

We’ll see.

CNN’s Brianna Keilar, Deirdre Walsh, Dana Bash, Erin McPike, Steve Brusk, Eliott C. McLaughlin, Paul Steinhauser, Ashley Killough, Craig Broffman, Jim Acosta, Mark Preston and Dan Merica contributed to this report.

UPDATE: The House of Representatives late Wednesday night passed a Senate-brokered bill to fully reopen the government and raise the federal government’s debt ceiling.

 

From earlier:

An agreement to end the partial government shutdown and avoid a possible U.S. default easily passed the Senate and headed to the House for a vote expected later Wednesday.

If approved by the Republican-led House, the legislation would go to President Barack Obama to be signed into law by the end of Thursday — the deadline for increasing the federal borrowing limit or risk the first default in American history.

“I will sign it immediately,” Obama said after the Senate vote on Wednesday night, adding that “we’ll begin reopening our government immediately.”

Such quick congressional action on a measure announced earlier in the day was in stark contrast to the protracted brinksmanship of recent weeks that led to the shutdown now in its 16th day and brought the threat of default.

The agreement represented a victory for Obama and Democrats over conservative Republicans, who had tried to use the shutdown and debt ceiling deadline to wring concessions on spending cuts and dismantling the Obama’s signature health care reforms.

However, the final deal worked out by Senate leaders after House Speaker John Boehner was unable to get his own Republican caucus to support a House GOP version lacked any substantive measures sought by the political right beyond extending current spending levels until January 15.

It also raised the federal borrowing limit until February 7 and set up budget negotiations between the House and Senate intended to come up with a broader spending plan for the rest of fiscal year 2014, which ends on September 30.

Another provision requiring the government to confirm the eligibility of people receiving federal subsidies under Obamacare was labeled by Democrats and the White House as minor.

“We fought the good fight; we just didn’t win,” Boehner told a radio station in his home state of Ohio.

In the 81 to 18 Senate vote, more than half of the chamber’s Republicans joined Democrats in support.

Both chambers had to take special steps to get the legislation passed quickly, raising concerns that tea party conservatives led by Sen. Ted Cruz of Texas would block or delay it in a final effort to include provisions intended to harm Obama’s signature health care reforms.

Just before the vote, Cruz called the compromise terrible but did not mount a filibuster or employ other procedural moves in opposition.

He had earlier criticized his Senate colleagues for what he called their failure to listen to the American people and said the fight against Obamacare would continue.

Democratic Sen. Chuck Schumer of New York blasted Cruz and the rest of the tea party wing in Congress for what he called the “reckless, irresponsible politics of brinksmanship over the last few weeks.”

“It was not America’s finest moment,” Schumer said.

In a brief statement before the expected House vote, Obama said politicians in Washington have to “get out of the habit of governing by crisis.”

“Hopefully, next time, it will not be in the 11th hour,” Obama told reporters Wednesday night, calling for both parties to work together on a budget, immigration reform and other issues.

National polls conducted since the start of the shutdown on October 1 indicate public anger with all sides over the partisan political impasse, with Republicans getting blamed more than Democrats or Obama.

Boehner and other House Republican leaders told their caucus earlier Wednesday they would vote for the agreement. Participants said the meeting ended with a standing ovation for the embattled speaker.

“Blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us,” Boehner said in a statement. “Our drive to stop the train wreck that is the president’s health care law will continue.”

News of the deal brought some relief to Wall Street as well as Washington, with pressure to resolve the impasse building with the approach of the Thursday deadline to raise the debt ceiling or face default.

Markets soar on agreement

U.S. stocks rose on the news of an agreement, with the benchmark Dow Jones Industrial Average jumping more than 200 points on the day.

Senate Majority Leader Harry Reid hailed the agreement he worked out with his GOP counterpart Mitch McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.”

Obama praised Senate leaders for reaching a compromise, and urged Congress to act quickly, White House spokesman Jay Carney said.

In an expected gesture to hundreds of thousands of federal workers furloughed by the shutdown, the measure provides back pay for wages withheld.

McConnell fired an opening salvo for the budget talks expected to begin soon and continue until December when he said any ensuing spending deal should adhere to caps set in a 2011 law that included forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

The focus on an agreement shifted to the Senate after House Republicans failed on Tuesday to come up with a plan their majority could support, stymied again by demands from tea party conservatives for outcomes unacceptable to Obama and Senate Democrats, as well as some fellow Republicans.

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would dismantle or defund the health care reforms known as Obamacare to previous proposals intended to end the shutdown.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was no chance they ever would have succeeded.

Republican Sen. Kelly Ayotte of New Hampshire called the House GOP tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

However, Republican Rep. Steve King of Iowa advocated continued brinksmanship to try to change Obamacare, which conservatives detest as a big-government overreach.

“If we’re not willing to take a stand now, then when will we take this stand?” he told CNN’s “New Day,” adding that if “the conservative Republican plan had been implemented five years ago, say at the inception of what is now the Obama presidency, we would have far less debt and deficit.”

Thursday marks the day the Treasury Department will run out of special accounting maneuvers to keep the nation under the legal borrowing limit. From that point on, it would have to pay the country’s incoming bills and other legal obligations with an estimated $30 billion in cash, plus whatever daily revenue comes in unless Congress acted.

Carney clarified that borrowing authority would continue through Thursday.

According to the best outside estimates, the first day the government would run short of cash without more borrowing authority was between October 22 and November 1.

The prospect of the U.S. government running out of money to pay its bills and, eventually, finding it difficult to make payments on the debt itself, had economists around the world talking about dire consequences. Mutual funds, which are not allowed to hold defaulted securities, might have to dump masses of U.S. treasuries.

Ratings agency Fitch fired a warning shot Tuesday that it may downgrade the country’s AAA credit rating to AA+ over the political brinksmanship and bickering in Washington that have brought the government to this point.

That could help raise interest rates on U.S. debt, putting the country deeper into the red.

Disarray among House Republicans caused confusion on Tuesday, with Boehner having to pull a proposed agreement from the floor because conservatives found it too weak.

The House proposal dropped some provisions on Obamacare but prohibited federal subsidies to the President and his administration officials as well as federal lawmakers and their staff receiving health insurance through the Affordable Care Act programs.

It also would have forbidden the Treasury from taking what it calls extraordinary measures to prevent the federal government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

House Democrats opposed the GOP proposal, which meant it couldn’t pass without support from the 40 or so tea party conservatives, who wanted more spending cuts.

“It just kicks the can down the road another six weeks or two months,” said Rep. Joe Barton, R-Texas.

House Majority Leader Eric Cantor referred to the GOP infighting at Wednesday’s caucus meeting, telling his Republican colleagues to stop beating up on each other, according to participants. Describing Cantor as impassioned, they said he implored the caucus to avoid characterizing each other as good or bad Republicans.
TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

Republican strategist, Democratic strategist on government shutdown vote

Senate leaders on Wednesday announced a deal to end the partial government shutdown and avoid a possible U.S. default as soon as midnight, and a key GOP conservative said he wouldn’t try to block the measure.

By Tom Cohen, Ben Brumfield and Greg Botelho, CNN

The country crashes into the debt ceiling at midnight, and there is no deal yet in Washington.

The deal-making resumes Wednesday, as the government slides into day 16 of the shutdown.

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Legislators dropped hints on their way home Tuesday that Senate leaders will present a deal to raise the debt ceiling and reopen the partially shuttered government.

And a Republican member of the House of Representatives is holding out hope that Speaker John Boehner could break with a Republican tradition to put that deal on a fast track.

After adjourning the Senate for the night around 10 p.m. Tuesday, majority leader Sen. Harry Reid sounded upbeat. “We’re in good shape,” the Nevada Democrat said.

Senate staffers burned midnight oil to draft a framework bill, and a spokesman for Reid said he and his counterpart, minority leader, Republican Senator Mitch McConnell, “are optimistic that an agreement is within reach.”

The Senate isn’t in session until noon Wednesday, but it’s possible that statements may go out in the morning in an effort to assure the markets of progress.

Slow process

Even so, it could take a day or two more for a deal to make it through the legislative process, longer than it will take for the debt ceiling to come grinding down, halting legal permission for the government to borrow money.

If a new bill hits walls, as in the past, it could take even longer, pushing the U.S. into its first-ever debt default.

The prospect of the U.S. government not meeting its debt obligations has economists around the world prophesying dire consequences. Mutual funds, which are not allowed to hold defaulted securities, may have to dump masses of U.S. Treasuries.

Ratings agency Fitch fired a warning shot Tuesday that it may downgrade the country’s AAA credit rating to AA+ over the political brinksmanship and bickering in Washington that has brought the government to this point.

That could help raise interest rates on U.S. debt, putting the country deeper into the red.

Rating agency Standard & Poor’s cut the U.S. credit rating from AAA to AA+ following the 2011 debt ceiling crisis. Moody’s still has the U.S. rated AAA.

Fast track

Boehner could put a Senate deal on a fast track, a Republican colleague told CNN’s Jake Tapper. But he’d have to make a bold political move to do so.

“I believe that John Boehner will likely be in a position, where he will have to essentially pass the bill that is negotiated between Senators McConnell and Reid,” said Republican Rep. Charlie Dent of Pennsylvania.

Then Boehner could shoot it over to the Senate for its quick approval, and it could then lateral it to President Obama to sign.

But Boehner would probably have to break a Republican tradition, the Hastert Rule, to do that.

The informal tenet, named after former Speaker Dennis Hastert, says that the House Speaker does not introduce legislation, unless a majority of Republicans say they will vote for it first.

It has served to keep proposals off the floor, even if they have the prospect of passing via the votes of Democrats combined with those of some moderate Republicans.

House Republicans have expected Boehner to uphold the rule, which asserts the party’s interests in the chamber, and he has pledged to do so.

A break from tradition

Dent hopes Boehner will make an exception and break the Hastert Rule to save the United States from a debt default, and he fears the Speaker will have to, if he wants the necessary legislation to pass.

Although many of his House Republican colleagues support the potential Senate deal, some would vote against it for political reasons, Dent said.

“There will be fewer Republican members voting for the bill than who actually support it,” Dent told Tappert on the Capitol Hill lawn. “We’re going to be seeing a lot of what I would call ‘hope yes, vote no.’”

That would leave it up to the Democrats to pass it along with a contingency of Republicans like himself, provided Boehner puts it to a vote.

If he does, Dent will vote in favor of it alongside many House Democrats, and he thinks enough of his moderate Republican colleagues will join him to “put it over the top.”

“The question is how many Republicans? Will it be closer to 20 or 75,” Dent said. “I don’t know. I hope I’m wrong.”

Dent says he feels that it is his basic duty to fund the government and keep it able to pay its debts. He believes that the majority of House Republicans feel the same way.

“The challenge is (that) there are two to three dozen members of the House Republican caucus that don’t share that,” he said. “It only takes two or three dozen to obstruct the will of the majority.”

Muddled plan

The House stumbled in an attempt to solve the problem Tuesday.

Sources said Tuesday that House Speaker John Boehner had been “struggling” to come up with enough votes in the GOP for it — even though the Ohio Republican himself said “the idea of default is wrong.”

The House proposal no longer attacks major parts of Obamacare, but does prohibit federal subsidies to federal lawmakers and their staff receiving health insurance through Affordable Care Act programs.

The House proposal also would have forbidden the Treasury from taking what it calls extraordinary measures to prevent the federal government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

House Democrats have said they would not support the House funding proposal. And it is unpopular with some Republican representatives, who see no spending cuts in it.

“It just kicks the can down the road another six weeks or two months,” said Rep. Joe Barton, R-Texas

There is no sign that it would receive the 217 votes necessary to pass the House.

Time running out

President Barack Obama will meet Wednesday with Treasury Secretary Jack Lew, who has been looking for creative ways to cover U.S. financial obligations as the debt ceiling comes down.

Obama called on Tuesday for House Republicans to “do what’s right” by reopening government and ensuring the United States can pay its bills. “We don’t have a lot of time,” he said.

But he acknowledged Boehner’s difficulty in getting his fellow House Republicans on the same page.

“Negotiating with me isn’t necessarily good for the extreme faction in his caucus,” Obama said, referring to the Tea Party and its conservative allies.

“It weakens him, so there have been repeated situations where we have agreements. Then he goes back, and it turns out that he can’t control his caucus.”

According to multiple sources, the House plan would have called for funding the government through December 15 to end the partial shutdown. It also would increase the federal debt ceiling until February 7.

This GOP plan may not yet be dead. As he left the Capitol, House Majority Leader Eric Cantor of Virginia said only that there would be “no votes tonight. We’ll see you in the morning.”

The rumored Senate proposal would give Republicans some concessions while being closer to what Obama and fellow Democrats have long pushed for regarding government funding and the debt ceiling.

None of the proposals so far often a grand bargain that would fund government and allow for borrowing for more than a few months.

CNN’s Craig Broffman, Jason Hanna, Greg Clary, Mark Preston, Dan Merica, Brianna Keilar and Janet DiGiacomo contributed to this report.

The chief federal judge of the U.S .District Court of Northern Illinois is highly critical of the federal government shutdown.

Judge Ruben Castillo says if the government doesn’t bring an end to the shutdown his 160 employees will have to come to work but will not get paid.

Castillo spoke at a Federal Bar Association luncheon in the Loop today and issued an order putting a stay on all civil cases.

If a trial has not started in a civil case, it will not start until federal funds are flowing once again.

By Tom Cohen, CNN

House Majority Leader John Boehner is “struggling” to come up with enough votes to pass a GOP counterproposal to a possible Senate agreement to reopen the government and avoid a U.S. default, a House Republican leadership aide and other sources told CNN’s Dana Bash and Deirdre Walsh.

[Original story moved at 11:20 a.m.]

A possible “bright day” in the U .S. Senate could mean a long day in the House.

Senate leaders from both parties say a deal is near to end the partial government shutdown and avoid a potential default as soon as this week.

However, House Republicans decided Tuesday to offer their own proposal that would tack on provisions changing President Barack Obama’s signature health care reforms in what appeared to be a last-gasp effort to influence the agreement to reopen the government and raise the federal borrowing limit.

According to GOP sources and confirmed by Republican Rep. Darrell Issa of California, the House plan would include most of what is in the Senate agreement while adding a provision to suspend an Obamacare tax on medical devices for two years and remove federal health care subsidies for Obama and legislators when they obtain health coverage under the reforms.

In addition, the House proposal would forbid the Treasury from taking what it calls extraordinary measures to prevent the government from defaulting as cash runs low, in effect requiring hard deadlines to extend the federal debt ceiling.

Issa said a House vote could occur as soon as Tuesday night, while Senate Majority Leader Harry Reid indicated his talks with GOP counterpart Mitch McConnell were moving toward an agreement.

“I am confident we will be able to reach a comprehensive agreement this week,” Reid said Tuesday, reiterating the optimism he expressed Monday night that raised hopes among investors, world leaders and regular Americans that the shutdown stalemate was nearing an end.

“Perhaps tomorrow will be a bright day,” he said Monday.

U.S. stock futures — often seen as an indicator of how markets will open — were up only slightly early Tuesday as investors largely waited out the politicians.

Obama spoke Monday with McConnell, according to a GOP Senate aide, but the White House canceled a planned meeting with congressional leaders in what was perceived as a move to give Reid and McConnell room to negotiate.

Sen. Bob Corker, R-Tennessee, said it was time to get a deal done after lengthy delays he blamed on the unrealistic goal of gutting Obama’s signature health care reform law.

“The fact is we’ve got to figure out a way to move ahead,” he told CNN’s “New Day” on Tuesday. “In fairness, on our side of the aisle, we’ve wasted two months, focused on something that was never going to happen.”

However, the House GOP decision to offer a counter-proposal promised further delay toward final congressional action on an agreement.

House Democrats immediately criticized the GOP plan, with Rep. Xavier Becerra of California calling it a “reckless attempt to try to circumvent what the Senate is doing” so close to the deadline for a possible U.S. default.

“That to me seems very irresponsible, and it certainly falls far short of being common sense,” he said.

The negotiations are also being closely watched by other nations, which would also feel the impact should the United States run out of money to pay some of its bills.

Jon Cunliffe, who will become the deputy governor of the Bank of England, told British lawmakers over the weekend that banks should begin planning for contingencies.

The partial shutdown — now in its 15th day — has proved costly. Hundreds of thousands of federal employees are either idle at home or not being paid for their work during the shutdown. Government offices, many parks and other facilities are closed. And officials warn that tough choices are ahead about which bills to pay and which to let slide, should the shutdown and debt ceiling debate drag on.

So far, the standoff has cost the economy about $20 billion in gross domestic product, CNN’s Christine Romans reported Tuesday on “New Day,” citing Mark Zandi of Moody’s Analytics. GDP is a measure of the goods and services produced by an economy.

At a visit Monday to a local food pantry, Obama warned of what he called continued partisan brinkmanship by House Republicans who “continue to think that somehow they can extract concessions by keeping the government shut down or by threatening default.”

“My hope is a spirit of cooperation will move us forward over the next few hours,” he said.

The finer points

Reid and McConnell have to reach a resolution on two critical issues: ending the partial government shutdown that began on October 1 and raising the debt ceiling so the U.S. can borrow more money to pay all the government’s bills.

Democrats want an increase in the debt ceiling to last for several months, to avoid similar showdowns in coming months.

At the same time, they want a spending plan to reopen the government, but one that will be temporary. This will allow them to work toward a longer-term agreement that can negate the effects of the forced sequestration cuts.

Republicans want the opposite.

They want a longer spending proposal that would lock in the planned sequestration cuts in coming months. And they want a shorter debt ceiling extension in order to negotiate further deficit reduction measures.

“We’ll get this done. We’re going to get this done. I feel real confident,” said Sen. Joe Manchin, D-West Virginia.

‘Solve this problem today’

At his visit to the Martha’s Table food pantry in Washington, Obama said the congressional leaders could “solve this problem today.”

He warned that a default — in which the government would lack enough cash on hand to pay down its debt obligations, as well as other daily bills such as Social Security checks — “could have a potentially devastating effect on our economy.”

“We’ve already had a damaging effect on our economy because of the shutdown,” he said. “That damage would be greatly magnified if we don’t make sure that government’s paying its bills, and that has to be decided this week.”

The Treasury Department has said it will be unable to pay the government’s bills unless the debt limit is increased by Thursday.

Details fluid

Democratic sources told CNN that the proposal under consideration by Reid and McConnell would fund the government through January 15, allowing it to reopen for at least three months or so.

At the same time, negotiations on a budget for the full fiscal year would have a deadline of sometime in December, the sources said.

Meanwhile, the debt ceiling would be increased through February 7 to put off the threat of default for almost four months, according to sources in both parties.

The budget negotiations were expected to address deficit reduction measures and therefore could affect when the debt limit would need to be increased again.

In addition, provisions involving Obama’s signature health care reforms could be included, such as strengthening verification measures for people seeking federal subsidies to help them purchase health insurance required by the 2010 Affordable Care Act, the sources said.

Another possible change to the health care reforms would delay a fee on employers, unions and other plan sponsors that raise money to compensate insurance companies for taking on high-risk customers in the early years of Obamacare.

CNN political analyst John Avlon said Monday that Democrats wanted to press what they perceive as an advantage over Republicans on how the public regards the latest round of Washington budget and deficit brinkmanship.

“What’s behind it (are) poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship,” Avlon said.

CNN’s Dana Bash, Jason Hanna, Dana Ford, Greg Clary, Deirdre Walsh, Mark Preston, Chelsea J. Carter, Dan Merica, Brianna Keilar and Janet DiGiacomo contributed to this report.

TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

By Tom Cohen and Matt Smith, CNN

As night fell over the Capitol on Monday, Senator Majority Leader Harry Reid struck a tone of optimism.

Talks with his Republican counterpart, Mitch McConnell, to end the partial government shutdown and avoid a U.S. default had made tremendous progress, he said.

capitolblue

“Perhaps,” he added, “tomorrow will be a bright day.”

That, indeed, is the hope among investors, world leaders and regular Americans weary of the government stalemate.

Financial markets that began the day Monday with falling stocks ended higher at day’s end, with Wall Street heartened by news of a possible deal.

The negotiations are also being closely watched by other nations, which would also feel the impact of a U.S. default.

John Cunliffe, who will become the deputy governor of the Bank of England, told British lawmakers over the weekend that banks should begin planning for contingencies.

Meeting postponed

As Reid and McConnell negotiated Monday, the White House announced that it was postponing a meeting between President Barack Obama and congressional leaders.

Most political experts took that to be a good sign — that Obama was stepping back as the two leaders made good progress on an agreement.

Any agreement that Reid and McConnell reach will likely pass muster in the Senate. But the big question is whether the Republican-dominated House will play ball.

Mindful that the Thursday debt deadline is days away, House Republican leaders are considering all their options, said a GOP leadership aide, speaking on the condition of anonymity.

During a visit Monday to a local food pantry, Obama warned of what he called continued partisan brinkmanship by House Republicans who “continue to think that somehow they can extract concessions by keeping the government shut down or by threatening default.”

“My hope is a spirit of cooperation will move us forward over the next few hours,” Obama said.

The finer points

Reid and McConnell have to reach a resolution on two critical issues: end the partial government shutdown that began October 1; and raise the debt ceiling so the U.S. can borrow more money to pay all the government’s bills.

Democrats want an increase in the debt ceiling to last for several months — to avoid similar showdowns in coming months.

At the same time, they want a spending plan to reopen the government, but one that will be temporary. This will allow them to work toward a longer-term agreement that can negate the impacts of the forced sequestration cuts.

Republicans, on the other hand, want the opposite.

They want a longer spending proposal that would lock in the planned sequestration cuts in coming months. And they want a shorter debt ceiling extension in order to negotiate further deficit-reduction measures.

“We’ll get this done. We’re gonna get this done. I feel real confident,” said Joe Manchin, D-West Virginia.

‘Solve this problem today’

During his visit to Martha’s Table in Washington, Obama said the congressional leaders could “solve this problem today.”

He warned that a default, in which the government would lack enough cash on hand to pay down its debt obligations as well as other daily bills such as Social Security checks, “could have a potentially devastating effect on our economy.”

“We’ve already had a damaging effect on our economy because of the shutdown,” he said. “That damage would be greatly magnified if we don’t make sure that government’s paying its bills, and that has to be decided this week.”

The Treasury Department said it will be unable to pay the government’s bills unless the debt limit is increased by Thursday.

Details fluid

Democratic sources told CNN that the proposal under consideration by Reid and McConnell would fund the government through January 15, allowing it to reopen for at least three months or so.

At the same time, negotiations on a budget for the full fiscal year would have a deadline of some time in December, the sources said.

Meanwhile, the debt ceiling would be increased through February 7 to put off the threat of default for almost four months, according to sources in both parties.

The budget negotiations were expected to address deficit reduction measures and therefore could impact when the debt limit would need to be increased again.

In addition, provisions involving Obama’s signature health care reforms could be included, such as strengthening verification measures for people seeking federal subsidies to help them purchase health insurance required by the 2010 Affordable Care Act, the sources said.

Another possible change to the health care reforms would delay a fee on employers, unions and other plan sponsors that raise money to compensate insurance companies for taking on high-risk customers in the early years of Obamacare.

CNN political analyst John Avlon said Monday that Democrats wanted to press what they perceive as an advantage over Republicans on how the public is perceiving the latest round of Washington budget and deficit brinkmanship.

“What’s behind it (are) poll numbers that saw Republicans getting their butt kicked because of this whole gamesmanship,” Avlon said.

CNN’s Dana Ford, Greg Clary, Deirdre Walsh, Mark Preston, Chelsea J. Carter, Dan Merica, Brianna Keilar and Janet DiGiacomo contributed to this report.

TM & © 2013 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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