COMMENT

PARTY CRASHERS

by Steve CollThe New Yorker

In the late nineteen-sixties, Mitch McConnell came to Washington to work as an aide to Senator Marlow Cook, a Kentucky Republican. Cook backed clean-air standards and limits on strip mining. It was a time of political diversity among Republicans: in 1970, Senate Republicans endorsed the creation of the Environmental Protection Agency and the Occupational Safety and Health Administration. McConnell was briefly a fellow-traveller of those who regarded government as a source of public protection. He once called the Nixon Administration “at worst, completely reactionary.”

In 1984, McConnell was elected to the Senate, on the coattails of Ronald Reagan’s landslide reëlection. By then, a movement of Southern and evangelical conservatives was rising within the Party. McConnell tacked right periodically, saluting the new Republican leaders. During the Administration of George W. Bush, he backed the President by voting, with Ted Kennedy, to enact No Child Left Behind and the expansion of the Medicare drug benefit. By 2009, after Wall Street melted down, McConnell had risen to Minority Leader, and he forged a deal with Democrats to bail out big banks.

Then the Tea Party rose up in fury, and McConnell moved right again, in an effort to reinvent himself as an anti-government insurgent. It wasn’t easy; he was sixty-nine, and his long jowls and round eyeglasses gave him the look of a Taft Administration clerk. Nonetheless, in 2011, he led the Senate Republicans through a ruthless, extortionate campaign to threaten default on the national debt. It succeeded. President Obama wobbled and accepted budget cuts. Afterward, McConnell called the national debt “a hostage worth ransoming.”

This autumn, he supported the Tea Party radicals’ second threat to default on the debt and a sixteen-day shutdown of the federal government. This time, though, Obama held firm, and, in the end, McConnell and House Speaker John Boehner were forced to choose between Tea Party principles and the viability of the world economy. McConnell negotiated his party’s late-hour capitulation, and, within days, Tea Party groups called for his ouster. The Senate Conservatives Fund, a PACfounded by Jim DeMint, the president of the Heritage Foundation, which has bankrolled Senator Ted Cruz, of Texas, and other highly conservative candidates, announced that it would finance a Republican primary challenge against the Minority Leader next year, because he “has a liberal record and refuses to fight for conservative principles.”

Other veteran Republicans who joined McConnell on the debt-ceiling vote are facing similar challenges from Tea Party-backed candidates. Those targeted include Thad Cochran, of Mississippi, who was elected to the Senate in 1978; Lindsey Graham, of South Carolina; and Lamar Alexander, of Tennessee. In 2012, such primary challenges weakened the Party’s competitive position, and allowed the Democrats to win an eight-seat majority in the Senate. Even now, the insurgents seem less interested in victory than in purification. “We know which senators fought for liberty, and which ones caved to Obama,” Lee Bright, the South Carolina state senator who is challenging Graham, told Slate recently. “We’ve got a list.” The Tea Party’s approval ratings have plummeted since the shutdown ended. Business lobbies and their PACs, appalled by the shutdown’s estimated twenty-four-billion-dollar cost to the economy, are signalling that they may pull back from uncompromising candidates. But the fact that PACs like the Senate Conservatives Fund are willing to force incumbents into expensive, distracting primary fights makes it even less probable that the Republicans can retake control of the Senate.

Like a guerrilla army, the Tea Party is learning how to influence public opinion even when it loses a conventional battle. The budget caps that Obama conceded in 2011 have already enshrined in law a portion of the movement’s draconian fiscal agenda. And although Cruz and his allies in the House won no additional cuts this time, they managed to spread magical thinking among their followers about a possible future debt default. (The next debt-ceiling deadline arrives early next year.) Cruz and the others systematically promoted the idea—the fantasy—that, if the Treasury Department were prohibited from issuing any new debt to finance interest payments and government operations, the country would do just fine. The global economy, this story goes, far from collapsing into crisis, would prove resilient, and, while some nonessential federal departments might wither for lack of funds, that would only demonstrate how Americans could get by with a much smaller government.

This campaign has been dismissed by some Wall Street analysts as just a form of coercive bargaining. Washington is a grand opera of phony crises. Congress has raised the debt ceiling more than seventy times since 1960 without forcing an actual default. It’s tempting to believe that even a diva like Cruz, who, after all, holds a law degree from Harvard and evidently aspires to higher office, would never countenance a final default. Yet history is rife with political radicals who have shocked the world by doing just what they always said they would: Confederate secessionists, for example, who seem to inspire so many Tea Partiers today.

The Tea Party’s anti-intellectualism reflects a longer, deeper decline in the Republican Party’s ability to tolerate a diversity of ideas and public-policy strategies, and to adapt to American multiculturalism. Mitt Romney’s poor showing among Latino voters in 2012 helped insure Barack Obama’s reëlection. Republican leaders, chastened and without any other obvious way to increase their vote base before 2016, pledged earlier this year to revive a comprehensive immigration-reform bill. Yet party leaders, in part because they have been tied down since July by the debt confrontation, haven’t found a way to move legislation past the nativist caucus in the House.

As recently as 2007, when the Bush Administration almost passed a similar bill, it still seemed possible that a modernizing Republican Party might build a formidable political coalition of Latinos, evangelicals, disaffected Catholic Democrats, high-tech entrepreneurs, libertarians, social and educational reformers, and eclectic independents. Instead, as Geoffrey Kabaservice puts it in his history of the Republican decline, “Rule and Ruin,” movement conservatives have “succeeded in silencing, co-opting, repelling, or expelling nearly every competing strain of Republicanism from the party.” Political purges have no logical end point; each newly drawn inner circle of orthodoxy leaves a former respected acolyte suddenly on the outside. That a Tea Party-influenced purification drive now threatens such a loyal opportunist and boardroom favorite as Mitch McConnell seems a marker of the times.

McConnell’s would-be usurper is Matt Bevin, a businessman who owns a bell company; his campaign slogan is “Let Freedom Ring.” He told Glenn Beck recently, “We have got to wean people from this idea of free lunches.” (He might start with fellow Kentuckians; their state pays sixty-six cents in federal taxes for every dollar of federal spending it takes in.) Bevin pleaded, “What we need to tell the American people is that the party’s over.” Presumably, he didn’t mean the Grand Old Party, but the American people may be forgiven for thinking that he did. ♦

ILLUSTRATION: TOM BACHTEL

With G.O.P. Badly Divided, Boehner Is Left ‘Herding Cats’

NY Times

WASHINGTON — After House Republicans began their closed-door meeting on Tuesday with an impromptu rendition of “Amazing Grace,” Speaker John A. Boehner stood up with what he hoped would be an equally inspiring message.

The Senate was trying to steamroll the House with a new plan to reopen the government and lift the debt ceiling, leaving his team with only two options: “We can wait on the Senate for four days and accept whatever they give us,” he told them. “Or we can go on offense and force their hand.”

It was yet another moment of decision for Mr. Boehner, who finally finds himself at the crossroads he has been marching toward for weeks: an imminent financial default on the one hand, and on the other an unyielding conservative rank and file that persists with the futile effort to take down President Obama’s health care laweven if they also take down the speaker in the process.

While his colleagues sang about how what once was lost had now been found, Mr. Boehner did not tell them a more dispiriting truth: With less than 48 hours left before the nation is set to exhaust its authority to borrow money, he and his lieutenants were running out of ideas — a fact made starkly evident by the mad and fruitless scramble on Tuesday to come up with a measure that could win enough support from his members. Around 7 p.m., he sent the House home and canceled all votes for the day.

“He’s herding cats,” said Representative Tom Price, Republican of Georgia.

Mr. Boehner initially tried to unite his conference around a plan that had a little bit for everyone. For his hard-line conservative members, Mr. Boehner’s proposal would have eliminated government contributions for the purchase of health insurance on the new exchanges for lawmakers, White House officials and their staffs, as well as forbidden the Treasury Department to use “extraordinary measures” to extend its borrowing capabilities. For his more moderate members, Mr. Boehner offered a simple appeal — his plan would have reopened the government through Dec. 15, and extended the nation’s borrowing authority through Feb. 7.

But conservatives and their advocacy groups balked, and Mr. Boehner was forced to set his plan aside.

“This is about as challenging as it can be, in terms of trying to figure out where the effective agreement is going to be to move forward and how do you get to that point where everybody looks at that and says, ‘Well, that isn’t everything but that’s a reasonable way forward,’ ” said David Winston, a Republican strategist and close adviser to Mr. Boehner.

Almost every day since the government shutdown began on Oct. 1, Mr. Boehner and his besieged band of House Republicans have trotted out a new gambit to try to outmaneuver Senate Democrats and the president. The public was upset over closed national monuments? Pass legislation reopening them. Vital health and safety services had no staff to carry out their functions? Appropriate money to finance them.

All the while, Mr. Boehner, of Ohio, tended carefully to the members of his fractious conference. He joined them Friday night for P. F. Chang’s Chinese takeout in the Capitol. After an appearance on the Sunday talk shows, he shopped at his local Harris Teeter and invited some lawmakers to his Capitol Hill town house for burgers, manning the grill himself. He assumed the role of battlefield commander, admonishing the president in public in the sternest of terms.

Mr. Boehner has also sought solace in his routines. He still takes long walks in the morning before heading to his office in the Capitol, and often eats breakfast alone at the counter of Pete’s Diner not far from his house. This month, shortly after the shutdown began, Mr. Boehner huddled in his Capitol suite with a group of allies and loyal members — Representatives Tom Cole of Oklahoma, John Kline of Minnesota and Pat Tiberi of Ohio, among others — known as Team Boehner.

The strategy has largely worked, so far satisfying the most unmanageable of Mr. Boehner’s restive conservative members. But the next 48 hours may prove the biggest test of Mr. Boehner’s career and determine his future at the top of House Republicans. “It’s tough,” said Senator Saxby Chambliss, the Georgia Republican who is one of the speaker’s closest friends in Congress. “Trying to find 218 votes is never easy. But right now, it’s harder than ever.”

Senator Lindsey Graham, Republican of South Carolina, who as a House member in the late 1990s was part of a successful coup to unseat Speaker Newt Gingrich, described Mr. Boehner’s tenuous state more bluntly, worrying aloud that if Mr. Boehner is unable to pass some proposal out of the House, the speaker may find himself in “a compromised situation.”

“I was involved in taking one speaker down,” Mr. Graham said. “I’d like to be involved in keeping this speaker, because quite frankly I think he deserves it.”

A major source of Mr. Boehner’s limitations as speaker is simple math. Republicans control 232 seats, and 218 are required for a majority when there are no vacancies, meaning that in most instances, he can afford to lose only 14 Republican votes. For much of the 113th Congress, that has meant that the only bills guaranteed to pass are simple, nonpartisan matters like renaming a federal building or ones that strongly reflect conservative policies like the ban on abortion 20 weeks after fertilization.

Because Mr. Boehner can almost never guarantee Senate leaders that his conference will vote with him, he has greatly diminished bargaining power in the current fight as his members pass one dead-end bill after another. “There’s a silent majority in the conference,” said Representative Devin Nunes, Republican of California. “We have too many guys who don’t understand that without 218 you have no leverage. At the end of the day, that’s the problem.”

That has not stopped Mr. Boehner from trying. He has been in near constant contact with Republican leaders in the Senate, who have conveyed to Mr. Boehner what they believe their moderate Democratic counterparts might be willing to accept. He has also been carefully soliciting the views of his own members, bringing in at least two small groups of moderate legislators for private meetings, and buttonholing other colleagues on the House floor and in the cloakroom.

“He is a really good listener,” said Representative James Lankford of Oklahoma, the chairman of the House Republican Policy Committee. “So he’s constantly trying to figure out, is this one person or is this a group that thinks this? And how large is that group? I just think he has a really unique skill of being able to hear people and where they are.”

Mr. Boehner may be unable to corral his maverick members, but they still rely on him heavily to bring in money for their re-elections: On Tuesday, in a telling reminder of his big-dollar prowess, Mr. Boehner’s campaign committee filed its third-quarter fund-raising report.

Boehner-affiliated committees transferred $4.1 million to the National Republican Congressional Committee during the third quarter, making him its largest source of member money, by far.

Derek Willis contributed reporting.

This article has been revised to reflect the following correction:

Correction: October 15, 2013

An earlier version of this article misspelled the surname of a California Republican who spoke about a “silent majority” in the Republican conference. He is Representative Devin Nunes, not Nunez.

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October 12, 2013

Stuck on Usual Quarrel: Raising New Revenue

By JACKIE CALMES

WASHINGTON — Be skeptical. Be very, very skeptical.

That was the reaction from nearly all corners to the talk of convening yet another round of bipartisan negotiations to reduce the nation’s long-term debt. The idea has resurfaced as a way of resolving the standoff between President Obama and the Republican-controlled House over reopening the government and increasing its legal borrowing limit, perhaps for months or even just weeks.

But even if the current talks soon resolve the immediate impasse, which did not look likely on Saturday, any renewal of negotiations for a long-term fiscal plan will run into the same underlying problem that has doomed efforts for the past three years.

Republicans refuse to raise additional tax revenue, and until they do, Mr. Obama will not support even his own tentative proposals for reducing spending on fast-growing social benefit programs, chiefly Medicare. During a White House meeting with Senate Republicans on Friday, he reiterated that the two go hand in hand, according to people who were there.

“Revenue remains obviously the biggest stumbling block,” said Ed Lorenzen, the executive director of the Moment of Truth Project, a fiscal advocacy group formed by the chairmen of Mr. Obama’s failed 2010 fiscal commission, Erskine B. Bowles, a former chief of staff for President Bill Clinton, and Alan K. Simpson, a former Senate Republican leader from Wyoming.

Brian Gardner, a senior vice president in Washington of the investment firm Keefe, Bruyette & Woods, said: “We’ve been through this fight before. I’m very skeptical on the grand bargain.”

Yet Speaker John A. Boehner, who only a week ago again ruled out raising taxes, is demanding as part of a short-term deal that he and Mr. Obama return to the bargaining table for a deficit-reduction blueprint covering many years and ultimately saving trillions of dollars.

While that prospect has cheered budget watchers in both parties, even they know the discouraging history of such negotiations. In the three years since Republicans won control of the House, there have been five bipartisan efforts to design a long-term debt-reduction plan, two of them between Mr. Obama and Mr. Boehner. All collapsed.

The most recent effort, between the White House and some Republican senators, died this summer.

Yet there is some broad common ground, which is why the idea of talks keeps surfacing. Both sides recognize that the United States must confront the rising costs of the benefit programs, especially Medicare and Medicaid but also Social Security. Those are driving projections that the mounting debt will become unsustainable after 2016, as more baby boomers begin drawing on benefits and health care costs rise.

Representative Paul D. Ryan of Wisconsin, the chairman of the House Budget Committee and the conservative Republicans’ fiscal guru, has retreated — for now — from insisting that Medicare be transformed into a voucherlike program and Medicaid into a much-reduced state block grant.

In a recent shift, he has proposed embracing several of Mr. Obama’s plans that would trim Medicare and Medicaid expenses by $400 billion over the first 10 years while otherwise leaving the programs unchanged. The savings would come in part by means-testing Medicare so that more affluent beneficiaries pay more for coverage and by ensuring that taxpayers are not subsidizing so-called Medigap policies that upper-income recipients buy for extra coverage.

Significantly, Mr. Ryan has been silent recently on the president’s health care law — a break from conservatives’ unattainable demands to defund, delay or even repeal the Affordable Care Act, and the major issue that led to the Republicans’ refusal to finance the government.

He has also noted that both sides want to overhaul the tax code, simplifying it by reducing tax breaks for corporations and individuals. The difference is that Republicans want to use new revenue from scouring the code to reduce Americans’ tax rates. Mr. Obama and Democrats say some of that revenue must be used to pay down the debt.

“This isn’t a grand bargain,” Mr. Ryan wrote in The Wall Street Journal last week, acknowledging his more modest proposals. “For that we need a complete rethinking of the government’s approach to health care. But right now we need to find common ground.”

That suggests a less ambitious outcome for any deficit-reduction talks that would spring from the current impasse. In the past, the general goal was $4 trillion in savings in 10 years that would compound over time.

Democrats and many Republicans also want to apply some new savings not to reduce the deficit, but to replace roughly $100 billion a year in across-the-board cuts known as sequestration, which since March have been hitting nearly all federal programs, domestic and military. Those cuts do not touch the benefit programs that are the root of the long-term debt problem.

While Republicans initiated the call for renewed negotiations, party lawmakers and senior aides said in interviews that they could not say exactly what Mr. Boehner would take to the table. Some pointed to Mr. Ryan’s recent suggestions. By contrast, Mr. Obama’s plan is well known: over some Democrats’ objections, he put it in his annual budget in April, hoping his concessions would entice Republicans to parlay.

The president proposed $1.8 trillion in deficit reductions over the next 10 years, including the $400 billion in Medicare and Medicaid savings. He also called for saving $230 billion by changing an inflation measure, the Consumer Price Index, which would have the effect of lowering the government’s annual benefit adjustments, including for Social Security, and raising revenue as some taxpayers more quickly reach higher tax brackets.

An additional $200 billion would come from other domestic and military programs; $200 billion more from accounts covering farm subsidies, federal employee retirement programs, the Postal Service and the unemployment compensation system; and still another $200 billion, he estimated, from lower interest payments on the reduced federal debt.

But Mr. Obama called for $580 billion in new tax revenue over 10 years by closing loopholes and offering tax breaks. And he wants any budget deal to provide more spending, not less, for investments in infrastructure, technology and research, and for universal prekindergarten programs. That would be a hard sell, but still far from the biggest impediment to a bipartisan deal.

“If you talk about reforming entitlements and adding revenues, boy, then both sides just go ballistic,” said Senator Saxby Chambliss, Republican of Georgia. “And right now the tension is so high, it’s just not the right time for it.” Mr. Chambliss knows the difficulties — he is not seeking re-election partly because of his frustrations after more than two years of seeking a grand bargain as part of a bipartisan group of senators known as the Gang of Eight.

Even the prospective bargainers are skeptical.

In January, with the start of a new Congress and Mr. Obama’s second term, Mr. Boehner declared that he would never again negotiate with the president, calling it “futile.”

So when Mr. Boehner last week raised the idea of a third round of talks during an Oval Office meeting of the president, Vice President Joseph R. Biden Jr. and Congressional leaders, Democrats rolled their eyes and laughed, according to people who were there.

“On the one hand, the speaker says he wants to have an open negotiation; on the other hand, he is shutting the door to eliminating a single tax break for the purpose of reducing the deficit,” said Representative Chris Van Hollen, Democrat of Maryland.

On the Republican side, a senior Congressional aide who declined to be identified while the parties were trying to break the impasse, said flatly: “We’re never going to have a grand bargain with this president, I think that is safe to say. Ever.”

 

Some say bitter rift between McConnell and Reid could endanger a deal

Washington Post

When Washington is in crisis and every other option has fallen to pieces — whether on rescuing Wall Street, rewriting national security rules or agreeing on a budget — Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) are usually the ones who put it all back together.

But if the two wily 70-somethings who are trying to resolve the current crisis make a deal once again, they will do so despite an increasingly bitter and distant relationship that some say is so fraught with animosity that it endangers their talks.

The rift traces to 2010, when Reid thought McConnell wasn’t upfront about how aggressively he would try to help defeat the Democrat in his tough reelection race in Nevada. McConnell, now dealing with a difficult campaign of his own in Kentucky, is incensed that Reid appears to be more than returning the favor. In recent years, McConnell has gone around Reid to cut deals with Vice President Biden.

On the Senate floor, their rhetoric has grown so heated that their colleagues recently held the equivalent of an intervention. Off the floor, their relationship has been marked by personal slights.

On Sunday, the two leaders remained far apart. A fleeting afternoon phone call was the only sign of negotiation, although it did prompt Reid to voice a touch of hope. “I’m optimistic about the prospect for a positive conclusion,” he said just before 5 p.m. as he closed up the Senate chamber and left the Capitol.

Still, there was no sign of progress in their standoff over federal agency budgets, which have emerged as the key hurdle in their talks, and their staff members spent the day questioning whether the other side was acting in good faith.

Some longtime friends fear that Reid and McConnell’s relationship has become so frayed that a deal might not materialize before Thursday, when the Treasury runs out of borrowing authority, setting up a potential default by the end of the month.

“There appears to be forces at work here that might cause us to get wrapped around the wheel,” said former senator Judd Gregg (R-N.H.), who retired in January 2011 after serving 18 years with both men.

Others suggest that the stakes are so high that two men with a combined 56 years of Senate experience will not allow bad blood to get in the way of a deal.

“They were hurt by one another, and they have issues that they are carrying, but I know them well enough to believe that that would take a back burner to the moment in history that they find themselves at,” said Sen. Barbara Boxer (D-Calif.), a 21-year veteran of the Senate.

The deep animosity between Reid, 73, and McConnell, 71, went public this summer, when they clashed over Democratic efforts to amend filibuster rules. McConnell called Reid “the worst leader in the Senate ever,” and Reid accused McConnell of a “breach of faith” over an earlier agreement designed to smooth the confirmation process for judicial and executive branch nominees.

Their daily clashes became so heated that rank-and-file senators requested a rare bipartisan caucus, which led to a highly unusual marathon meeting of almost all 100 senators in the Old Senate Chamber and a bipartisan pact that averted what Reid had threatened: a unilateral, party-line vote to change the filibuster rules.

Page 2 of 3

Although that deal prevented what some called a “nuclear winter” in the Senate, it did little to thaw relations between Reid and McConnell.

In early September, Reid hosted a Friday night dinner for all the living Senate leaders in the Lyndon Baines Johnson Room, just off the Senate floor. The guest list, however, was restricted to those who had served as majority leader, and Reid’s guests took that as a slight to McConnell, who has been stuck as minority leader for seven years.

Although they have long been able to work together, Reid and McConnell have never been close friends. Reid often speaks in blunt terms that can be off-putting to McConnell, according to those close to both men, while McConnell is so reserved that it’s difficult to tell what he’s thinking.

But colleagues and close advisers to both senators said their relationship really started to get ugly when Reid faced an extremely difficult race in 2010. Unpopular at home and a target in the tea party wave, Reid felt that McConnell misled him about how involved he would be in trying to oust him, according to those close to the majority leader.

The National Republican Senatorial Committee, which McConnell controls as his party’s leader, even ran ads attacking Reid for living in the Ritz-Carlton when he’s in the District.

Now that McConnell is running for reelection in 2014, Reid has helped recruit a Democratic challenger, Alison Lundergan Grimes, and on Friday his friends in Las Vegas hosted a fundraiser for her, an event Reid missed only because of the stalemate over the government shutdown and the debt-ceiling deadline. A super PAC run by close advisers to Reid began running ads skewering McConnell more than 15 months before the general election.

This has infuriated McConnell, his allies say, because in 2010 he never campaigned with Reid’s opponent, tea party favorite Sharron Angle.

Reid and McConnell’s relationship has been so poor in recent months that they have used intermediaries to negotiate. When the two leaders kicked off talks Saturday morning, they were not alone — Sen. Charles E. Schumer (D-N.Y.) stood with Reid, while Sen. Lamar Alexander (R-Tenn.) was with McConnell.

Despite their differences, Reid and McConnell have taken similar paths in the Senate.

Holding the title of majority leader has been the life ambition of both men since they came to Washington in their 20s, McConnell as an intern and Reid as a Capitol Police officer working his way through George Washington University Law School. McConnell won his first Senate race in 1984, Reid two years later, and each set a course of doing all the nettlesome jobs that others never wanted to do.

Both focused their legislative careers on the Appropriations Committee, where they steered hundreds of millions of dollars to their states and directed dollars to colleagues needing help for their own home-state projects. Both did stints as chairman of the Ethics Committee, a thankless job of policing fellow senators, and both served several years as whip — spending countless hours on the floor learning every in and out of parliamentary procedure.

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Over the past few days, Reid has avoided mentioning the recent fights and has focused his public comments on deals that he and McConnell have made, including creating a task force that broke through decades of turf wars among committee chairmen to reorganize oversight of national security agencies, implementing the 9/11 Commission’s recommendations. Gregg credited the leaders for shepherding the 2008 Wall Street bailout to passage, first deputizing their allies to craft the deal and then slapping some popular riders onto it after the House choked on the bill.

Each man got his party’s top job by playing the role of intensely loyal lieutenant — in contrast to deputies who often scheme behind their leaders’ backs. Reid succeeded Tom Daschle in 2005 after he lost his South Dakota reelection, and McConnell succeeded Bill Frist (Tenn.), who retired in January 2007.

McConnell is widely considered the better political tactician and Reid more of a parliamentary insider, although in the past few years those roles have been reversed.

Reid has won the political wars time and again, building the most durable Senate majority in a generation as McConnell has floundered trying to get his preferred candidates through the GOP’s nomination process. By the end of 2014, Reid’s eight-year run as majority leader will rank as the third-longest in history.

Relegated to the minority, McConnell has become the deal-closer in recent fiscal battles. His allies have accused Reid of being incapable of finishing off a deal, preferring instead to deliver insults that please liberals. That’s why the GOP leader has often sought out Biden, a former senator, to finalize pacts with the White House.

McConnell alluded to this in his only public remarks Sunday, a statement issued by his aides: “It’s time for Democrat leaders to take ‘yes’ for an answer.”

Reid’s allies have accused McConnell of being too cautious in dealing with the increasingly conservative right wing of his party. One confidant said that on several occasions the majority leader thought he had a deal with McConnell over a set of nominations, only to find out that the GOP leader had problems clearing them with rank-and-file Republicans.

That’s one reason that Reid, in July, pushed another effort to rewrite the chamber’s filibuster rules, making public the leaders’ strained relations, which had been a barely hidden secret.

Despite all that, some senators look at the past six months and see a series of bipartisan legislation that has moved out of the Senate — a farm bill, an immigration overhaul, a water infrastructure package — and predict that Reid and McConnell will get it done this time, too.

They’ve been able to make deals when it counts,” Sen. Amy Klobuchar (D-Minn.) said Saturday on her way into Reid’s office. “Through all the toxic times, the two of them have shown the capacity to work deals.”

U.S. Senate leader sees chance for breaking fiscal impasse

By David Lawder and Tim Reid

WASHINGTON | Sun Oct 13, 2013 7:56pm EDT

(Reuters) - Senate negotiations to bring a boiling fiscal crisis to an end showed signs of progress on Sunday, but there were no guarantees that the U.S. federal government shutdown was about to end or that a historic default would be avoided.

Friday's optimism that a deal might be forged before financial markets opened on Monday vanished on Saturday and the talks moved from the acrimony of the House of Representatives to the Senate.

Negotiations that were likely to stretch into the week continued between the Senate's top Democrat and Republican.

Underscoring the urgency of resolving the impasse, both the Senate and House are scheduled to be in session on Monday, even though it is the Columbus Day federal holiday.

However, whatever deal the Senate might reach will still have to return for approval by the House, where the Republican majority faces strong pressure from its vocal conservative flank not to make any concessions to President Barack Obama and his Democratic Party.

Given that, hopes for forcing a conclusion before the Treasury reaches its debt ceiling on Thursday and runs out of authority to borrow may hinge in part on fear of tumbling investor confidence.

Financial markets began the week in Asia with a close eye on developments. U.S. stock index futures fell and the safe-haven yen rose broadly, foreshadowing a rocky start for Asian shares after the weekend failure to reach an agreement.

U.S. stock index futures fell 0.8 percent in early trade. If the losses are sustained, it indicates that Wall Street would open lower later on Monday.

U.S. stocks had risen strongly ahead of the weekend on hopes a deal to raise the $16.7 trillion federal borrowing limit was near. Failure to raise the debt ceiling would leave the world's biggest economy unable to pay its bills in the coming weeks.

SUNDAY SESSION

On Saturday, House Speaker John Boehner informed his rank-and-file that the negotiations with the White House had collapsed. The focus moved to the Senate, which held a rare Sunday session with lawmakers delivering speeches about the prolonged standoff to an empty chamber.

Behind the scenes, Senate Majority Leader Harry Reid and Republican leader Mitch McConnell held conversations that Reid later called "substantive." Reid did not provide details. But if they bear fruit those talks could lead to a series of rapid legislative actions.

Reid's remarks capped a dreary Washington day that gave some hope that Congress soon might pass legislation to fund the government - in shutdown mode since October 1 - and increase borrowing authority.

"I'm optimistic about the prospects for a positive conclusion to the issues before this country today," Reid said before closing the Senate for the day.

Earlier on Sunday, McConnell issued a statement calling on Democrats to accept a bipartisan plan that would end the government shutdown and raise the borrowing authority.

What started as a Republican effort to fight Obama's signature healthcare reform law by depriving it of funds and blocking a budget agreement has morphed into a stalemate on other issues.

"I don't even understand, at this moment, what this is about," said Democratic Senator Claire McCaskill, "It's not about Obamacare anymore. Is it about reforming Medicare and Social Security? That's not clear. Is it about how much money we're spending? That's not even clear. It feels like we're boxing shadows,"

Senator Dick Durbin, the second-ranking Democrat, boiled the fight down to just a couple of seemingly easy matters to resolve: the size of the increase in Treasury's borrowing authority and how much the government would be allowed to spend in a temporary funding bill after money ran out with the September 30 end of fiscal year 2013.

Nonetheless, Democrats and Republicans jockeyed to win added provisions to those two basic issues, slowing the talks.

While McConnell urged Democrats to accept a bipartisan plan that has been developing for several days, some senators and their aides said that details were still being worked out on the very measure the top Republican was touting.

But if those discussions progress, the normally slow-moving Congress could kick into high gear.

In 2011, during the last major battle over the debt limit, a deal was announced the night of July 31 of that year. By August 1, the House of Representatives had passed a bill; the next day the Senate went along and hours later, Obama had signed it into law.

Even so, the 2011 fight went right down to the wire and this year's battle seemed to be shaping up no differently. If a deal is reached, lawmakers could be voting on it as late as Wednesday or Thursday.

FOREIGN AND DOMESTIC CRITICS

As the acrimony continued, China's state news agency Xinhua called for an end to the "pernicious impasse" and said it was time for a "de-Americanized world."

China is among the largest foreign holders of U.S. debt.

In Washington, U.S. veterans' and conservative Tea Party groups protested the government shutdown, taking down barricades around the World War Two memorial on the National Mall before marching to the gates of the White House.

Police officers, some in riot gear, pushed back against the crowd when it got too close to the White House fence, creating a brief flashpoint of anger in an otherwise peaceful demonstration.

The rally included speeches from Sarah Palin, a hero of the Tea Party movement and former Republican governor of Alaska, and Ted Cruz, a freshman Republican senator who has crusaded against Obama's healthcare law.

Cruz played a key role a few weeks ago in stoking Tea Party fervor against Obamacare and encouraged conservative House members to hold out for major changes to the law even if it meant a partial government shutdown.

They have not won any changes to the law yet. But they won a government shutdown. Since then, House Republican leaders' efforts to broker a way out of the standoff failed, leaving senators to try to find a deal.

"Here's what I'm worried about," Republican Senator Lindsey Graham told ABC's "This Week," "a deal coming out of the Senate that a majority of Republicans can't vote for in the House."

House leaders spoke bitterly Saturday of the prospect of being "jammed" later this week: put in a situation by the Senate and possibly by market turmoil of having to rush something through at the last minute, probably with the votes of Democrats as well as the some of the Republican majority.

(Additional reporting by Lisa Lambert, David Brunnstrom, Paul Eckert, and Anna Yukhananov in Washington and David Gaffen in New York; Writing by Richard Cowan, Editing by Fred Barbash and Frances Kerry)

Senate Leaders Talk but Fail to Reach Deal on Shutdown

NY Times

WASHINGTON — With a possible default on government obligations days away, talks between the Democratic and Republican leaders of the Senate on Sunday failed to break an impasse over the spending level for a stopgap measure to reopen the government two weeks after much of it shut down.

Senator Harry Reid of Nevada, the majority leader, and Senator Mitch McConnell of Kentucky, the Republican leader, spoke cordially by telephone but remained deadlocked. The stumbling block is over spending levels, the length of a debt ceiling increase and how long a temporary spending measure should keep the government open until a longer-term budget deal can be reached.

Republicans reacted with frustration over what they saw as the shifting demands of a Democratic leadership intent on inflicting maximum damage on adversaries sinking in the polls and increasingly isolated.

“The Democrats keep moving the goal posts,” Senator Susan Collins, Republican of Maine and a lead negotiator, said Sunday. “Decisions within the Democratic conference are constantly changing.”

But Democratic aides said a deal taking shape among a bipartisan group of senators offered Democrats nothing beyond a reopening of the government and temporary assurances that the government will not default in the coming days. Those should be seen not as concessions but as basic obligations of Congress, they say.

Senator Lindsey Graham, Republican of South Carolina, said earlier on ABC’s “This Week” that he could feel a deal “coming together” as Mr. Reid and Mr. McConnell prepared for their second day of talks.

But Mr. Graham also warned his colleagues that the longer the showdown lasted, the more damage they were doing to Congress. “To my colleagues in the House on both sides, and to my friends in the Senate, we’re ruining both institutions,” he said.

Earlier, Senator Rob Portman, Republican of Ohio, said Mr. Obama was to blame for his refusal to deal with the fiscal crisis. “This is the first time in history that a president of the United States has said, ‘Look, I’m not even going to talk about it,'” Mr. Portman said on NBC’s “Meet the Press.” He added later: “The president should engage. You’ve got to deal with the underlying problem, which is the spending problem.”

On CNN’s “State of the Union,” Senator Rand Paul, Republican of Kentucky, played down fears that a default on the debt this week would be the cause of a downgrade of the nation’s credit rating, as happened during a similar showdown in 2011. The downgrade, he said, was not caused by the threat of default, but by the size of the United States’ debt.

“The vast majority of people are afraid of what this growth of our debt is going to do to us,” he said.

On Saturday, Mr. Reid said he was slightly optimistic about his dialogue with Mr. McConnell. “I hope that our talking is some solace to the American people and the world,” he said. (Not far away, officials meeting in Washington at the annual sessions of the International Monetary Fund and World Bank publicly expressed alarm that the United States might provoke a global debt crisis by Congress’s inaction.)

“Senator McConnell and I have been in this body a long time,” Mr. Reid added. “We’ve done things for a long time together. We don’t agree on everything, and that’s, as you know, an understatement.”

The relationship between the two men has been so chilly that it took two other senators, Charles E. Schumer, Democrat of New York, and Lamar Alexander, Republican of Tennessee, to arrange the meeting.

For Speaker John A. Boehner and other House Republicans, the options were much grimmer. If Mr. Boehner compromises, he risks angering the conservatives who dominate his conference. For its part, the White House is sticking with its stance that it will not negotiate until the government is reopened and the debt ceiling is raised.

The White House had no public events planned on Sunday, although aides did not rule out that Mr. Obama might confer with some lawmakers, as he did with Senate Democrats on Saturday afternoon. Mr. Schumer, who was at that meeting, said: “There’s a will among all three parties — the president, Senate Democrats and Senate Republicans. Now we’ll see if there’s a way.”

Earlier on Saturday, conservatives left their meeting at the Capitol in a sour mood, with many saying they were outraged that Mr. Obama had refused to meet them halfway.

Representative John Carter of Texas described Mr. Obama as “acting like a royal president.”

“He’s still ‘my way or the highway,'” Mr. Carter said.

With concerns growing that global financial markets could be thrown into turmoil if Congress does not agree to raise the debt ceiling, Republicans said they did not know whether Mr. Boehner would have enough support from the most conservative members in his conference to put a Senate plan up for a vote — if the leaders reach a deal.

“The question is: What will Senate Republicans do; what will Senate Democrats do?” said Representative Adam Kinzinger, Republican of Illinois.

Representative Devin Nunes, Republican of California, added: “The problem here is that we don’t have a functioning majority. After three weeks of this, they’re still not figuring it out. I don’t know what it takes.”

The failure of talks with the White House further strained the relationship between House Republicans and the president. It was the House Republicans’ refusal to approve a spending bill unless it stripped financing from the health care law that shut down the government. And now Republicans in the Senate and the House are looking for a way out of the crisis.

With the latest developments, Representative Aaron Schock, Republican of Illinois, said there had been “a total breakdown in trust” between House Republicans and the administration.

Feelings ran so high on the House floor on Saturday morning that there was a brief altercation between Representative Joseph Crowley, a New York Democrat, and Chris Vieson, the floor director for Representative Eric Cantor of Virginia, the majority leader. There were conflicting reports about whether the conflict became physical or was confined to words, but both sides said they had apologized.

If Republicans needed any reminder about how outraged their most conservative supporters would be if they committed to a compromise that did not include provisions to weaken the health care law, they needed look no further than out the window. Glenn Beck, the fiery radio personality, was leading a group of Tea Party activists on the National Mall.

Government Shutdown Negotiations Stuck On Sequestration

WASHINGTON -- As the United States government approaches a deadline for raising the debt limit and the government shutdown nears its second week, Senate Democrats are taking a stand on sequestration.

The party’s leadership rejected an offer from Senate Republicans on Saturday morning mainly because the proposal locked in those budget cuts for too long.

Senate Majority Whip Dick Durbin (D-Ill.) called it the “single biggest sticking point” in negotiations, while his counterpart in leadership, Sen. Chuck Schumer (D-N.Y.) deemed it the central dispute.

“The parties have different views. We passed a budget of $1.058 trillion and they passed one -- the Ryan budget -- [at] $988 [billion],” Schumer said. “So that is a serious issue.”

Democrats' stand over sequestration is a nice surprise for some progressive members who worried leadership would cave in this area. But instead, they were emboldened after polling showed them with the upper hand in budget fights. Democrats also noted that they, too, were concerned about the severity of the cuts.

Under a Senate Republican proposal crafted by Sen. Susan Collins (R-Maine), the government would have been funded at $988 billion for the next six months. Many Senate Democrats said they could live with that number -- just not for that long.

“If we can have a short term [continuing resolution at $988 billion] to get us through, say, the first of December, that is fine with me,” Sen. Tom Harkin (D-Iowa) told The Huffington Post.

The question, said Sen. Angus King (I-Maine), was: “Are we locked into the number for what amounts to the next year, or are we going to be able to get to the point where there are budget negotiations that can work with that number?”

The concern for Harkin and King, among others, is that the party could sacrifice too much negotiating power by signing off on Collins’ plan. Under the Budget Control Act, annual spending will be reduced to $967 billion around Jan. 15, regardless of the budget at the time. Democrats want to avoid that. They've concluded that it would be a misstep to put off a motivating moment (such as a budget deal ending) for those negotiations for six months, or to go on record supporting a six-month, $988 billion budget.

“[Waiting] would dis-incentivize the negotiation. It would put Democrats on a weaker ground,” said a top Senate Democratic aide. “If, in the next few days, we break the will of [Speaker] Boehner and Senate Republicans, and we pass both a clean CR and debt limit increase, I think that there is a belief within the Senate Democratic caucus that there is absolutely no way that they would have any leverage to make major demands in future negotiations about this, that we would be in a better position.”

Hints that Republicans may end up playing ball on sequestration emerged this week. House Budget Committee Chairman Paul Ryan (R-Wis.) hinted that he would be willing to trade sequestration relief for entitlement reforms. Democrats aren’t ready to make that exchange yet because they view it as imbalanced, and because they want to get through the current crisis first.

During talks Saturday morning, aides with knowledge of the meeting say, Senate Budget Committee Chairwoman Patty Murray (D-Wash.) implored her colleagues that it would be a misstep to agree to the spending levels in Collins’ plan. Many lawmakers emerged from that meeting calling Murray’s presentation convincing.

“Patty Murray makes a very important point,” said Durbin. “If she is bound going into a budget conference by the Paul Ryan number, where is her bargaining power? Some Senate Republicans were insisting on that. But that’s unfair.”

White House officials, meanwhile, have signaled to Senate Democrats that waging a fight over sequestration during current talks is acceptable. An administration official told The Huffington Post that while they found the Collins’ proposal “constructive,” they had concerns about the spending levels.

With just five days until the debt ceiling deadline, the party is now holding out. The goal, ultimately, is to produce a deal that funds the government at $988 billion, but only for a short period of time, and to include a framework in which both chambers negotiate to replace sequestration more fully.

“We clear back to a clean state and start where we were before,” explained Harkin. "That’s where the appropriations and the budget negotiations need to start from. Patty Murray should start from negotiating from our standpoint – $1.058 trillion. And if they want to start from their standpoint, fine.”

Also on HuffPost:

Obama and the Debt 

New York Times

PRINCETON, N.J. — THE Republicans in the House of Representatives who declare that they may refuse to raise the debt limit threaten to do more than plunge the government into default. They are proposing a blatant violation of the 14th Amendment, which states that “the validity of the public debt of the United States, authorized by law” is sacrosanct and “shall not be questioned.”

Yet the Obama administration has repeatedly suppressed any talk of invoking the Constitution in this emergency. Last Thursday Jay Carney, the White House press secretary, said, “We do not believe that the 14th Amendment provides that authority to the president” to end the crisis. Treasury Secretary Jacob J. Lew reiterated the point on Sunday and added that the president would have “no option” to prevent a default on his own.

In defense of the administration’s position, the legal scholar Laurence H. Tribe, who taught President Obama at Harvard Law School, has insisted, as he put it two years ago, that “only political courage and compromise” can avert disaster.

These assertions, however, have no basis in the history of the 14th Amendment; indeed, they distort that history, and in doing so shackle the president. In fact, that record clearly shows that Congress intended the amendment to prevent precisely the abuses that the current House Republicans blithely condone.

Congress passed the 14th Amendment and sent it to the states for ratification in June 1866. Its section on the public debt began as an effort to ensure that the government would not be liable for debts accrued by the defeated Confederacy, but also to ensure that its own debt would be honored.

That was important because conservative Northern Democrats, many of whom had sympathized with the Confederacy, were in a position to obstruct or deny repayment on the full value of the public debt by paying creditors in depreciated paper money, or “greenbacks.” This effective repudiation of obligations already accrued — to, among others, hundreds of thousands of Union pensioners and widows, as well as investors — would destroy confidence in the government and endanger the economy.

As the wording of the amendment evolved during the Congressional debate, the principle of the debt’s inviolability became a general proposition, applicable not just to the Civil War debt but to all future accrued debts of the United States. The Republican Senate leader, Benjamin F. Wade of Ohio, declared that by placing the debt “under the guardianship of the Constitution,” investors would be spared from being “subject to the varying majorities which may arise in Congress.”

Two years later, on the verge of the amendment’s ratification, its champions inside the Republican Party made their intentions absolutely clear, proclaiming in their 1868 party platform that “national honor requires the payment of the public indebtedness in the utmost good faith to all creditors at home and abroad,” and pronouncing any repudiation of the debt “a national crime.”

More than three generations later, in 1935, Chief Justice Charles Evans Hughes, ruling in the case of Perry v. the United States, revisited the amendment and affirmed the “fundamental principle” that Congress may not “alter or destroy” debts already incurred.

House Republicans threatening to refuse to raise the debt ceiling — that is, force a repudiation of debts already accrued — would violate that “fundamental principle” of the Constitution.

Surely the lawyers advising and defending the White House, let alone the president, know as much. Refraining from stating this loudly and clearly, and allowing Congress to slip off the hook, has been a puzzling and self-defeating strategy, leading to the crippling sequester and the politics of chronic debt-ceiling crisis. More important, by failing to clarify the constitutional principles involved, the administration has neglected to do its utmost to defend the Constitution.

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That failure has led to another abdication, involving constitutional action as well as constitutional principle. The White House, along with Mr. Tribe, has rightly pointed out that the 14th Amendment does not give the president the power to raise the debt limit summarily.

But arguing that the president lacks authority under the amendment to halt a default does not mean the executive lacks any authority in the matter. As Abraham Lincoln well knew, the executive, in times of national crisis, can invoke emergency powers to protect the Constitution.

Should House Republicans actually precipitate a default and, as expected, financial markets quickly begin to melt down, an emergency would inarguably exist.

In all, the Constitution provides for a two-step solution. First, the president can point out the simple fact that the House Republicans are threatening to act in violation of the Constitution, which would expose the true character of their assault on the government.

Second, he could pledge that, if worse came to worst, he would, once a default occurred, use his emergency powers to end it and save the nation and the world from catastrophe.

Were the president to act with fortitude, Republicans would continue to lambaste him as the sole cause of the crisis and scream that he is a tyrant — the same epithet hurled at Andrew Jackson, Lincoln and Franklin D. Roosevelt.

Lincoln, who became accustomed to such abuse, had some choice words in 1860 for Southern fire-eaters who charged that he, and not they, would be to blame for secession if he refused to compromise over the extension of slavery: “A highwayman holds a pistol to my ear, and mutters through his teeth, ‘Stand and deliver, or I shall kill you, and then you will be a murderer!’ ”

It is always possible that if the administration follows the two-step constitutional remedy, the House might lash out and try to impeach Mr. Obama. Recent history shows that an unreasonable party controlling the House can impeach presidents virtually as it pleases, even without claiming a constitutional fig leaf.

But the president would have done his constitutional duty, saved the country and undoubtedly earned the gratitude of a relieved people. Then the people would find the opportunity to punish those who vandalized the Constitution and brought the country to the brink of ruin.