“It is very unwise,” Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said of the Republican demand.
Obama spoke with McConnell yesterday and said the administration wants flexibility for the Treasury Department’s borrowing, according to a person familiar with the conversation who requested anonymity to describe private discussions.
The accord being worked out wouldn’t include repealing or delaying an excise tax on medical devices, said the person familiar with the talks and a Senate Democratic aide who requested anonymity. Republicans had sought that change, joined by some Democrats who represent states such as Minnesota with concentrations of device makers.
The plan would postpone a reinsurance fee the government is levying on health plans for the first three years of the health- care exchanges -- amounting to $63 a worker next year, said the person familiar with the talks. Labor unions, aligned politically with Democrats, have asked for the delay.
Democrats could claim that the agreement is a trade of health-law measures favored by each party that just happens to be linked to a debt-ceiling increase and spending bill free of policy conditions. Republicans could say they got health-law changes attached to the must-pass measures.
The agreement also would give federal agencies flexibility to manage the across-the-board spending cuts known as sequestration if they occur in 2014.
“This is an agreement that doesn’t contain a lot of partisan pills that are really anything except keeping the government open,” said Senator Amy Klobuchar, a Minnesota Democrat, said today on CBS “This Morning.” The deal gives lawmakers “a short time frame, which was important to both Democrats and Republicans because we really want to have an incentive to negotiate a larger budget deal so that we don’t lurch from financial crisis to financial crisis.”
The partial government shutdown began Oct. 1 after Republicans insisted on changes to the 2010 Patient Protection and Affordable Care Act. Backed by Cruz, they started with a plan to defund the law and ended up seeking a one-year delay of the requirement for individuals to purchase health insurance.
Obama and Democrats resisted, and the president said that Republicans were trying to extract a ransom just for doing their jobs. After a 2011 agreement that produced more than $2 trillion in spending cuts, Democrats are trying to use the fiscal impasse to set a precedent against future negotiations set against the backdrop of default.
An ABC News/Washington Post poll found that 74% of Americans disapprove of how Republicans have been handling the fiscal impasse, compared with 53% who disapprove of Obama’s approach.
“We’ve basically blown the last two months with some of our members, and a lot of the House, focused on a shiny object that was never going to happen,” said Senator Bob Corker, a Tennessee Republican. “So we find ourselves four days from a debt ceiling and all of a sudden, 72 hours ago, we began talking about the right subject, which is spending and entitlement reforms and those kinds of things.”
The lack of significant health-law changes in the Senate agreement is causing concerns for some House members.
Representative Charles Boustany, a Louisiana Republican, said party leaders will have “a hard time” gaining support from a number of House Republicans “because of the lack of Obamacare features” in the Senate proposal.
“The one good news” is the spending level won’t change, Boustany said. “That’s a victory.”
The House hasn’t passed debt-ceiling legislation, in part because hard-liners were demanding hundreds of billions of dollars of spending cuts to entitlement programs.
“All of us should be worried that we can’t get a majority for anything,” Representative Devin Nunes, a California Republican, told reporters at the Capitol yesterday. “I’ve always thought that the House should actually do something with 218 votes that’s realistic and gives us a firm position, but we haven’t proven that we can do that.”
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.