The House GOP Just Derailed a Shutdown Deal
Policy + Politics

The House GOP Just Derailed a Shutdown Deal

REUTERS/Jonathan Ernst

With the Senate almost on the verge of a bipartisan deal to end the government shutdown and avert a default, House Speaker John Boehner (R-OH) decided once again to player the spoiler.

In a troubling reprise of the fiscal cliff and previous stalled budget negotiations, House Republicans are floating their own budget plan that focuses more on political messaging than reaching a compromise.

On Tuesday, Senate Democratic and Republican leaders were putting the finishing touches on a plan that would reopen the government and fund agencies through mid-January and extend the Treasury’s borrowing authority through Feb.7, while launching talks on a larger budget deal that would be ready by Dec. 13.

But House Republicans were cooking up an alternative that tacked on anti-Obacare measures and said nothing about forming a bicameral committee to iron out larger differences between the two parties.

Boehner told reporters after a caucus meeting that he and other leaders were “trying to find a way forward in a bipartisan way that will continue to provide fairness to the American people under Obamacare.”

“There are a lot of opinions about what direction to go,” he added. “There have been no decisions about what exactly we will do. But we will continue to work with our members on both sides of the aisle to try to make sure that there is no issue of default and to get our government reopened.”

Their add-ons to the Senate plan would include:

* A two-year delay in the medical device sales tax designed to raise $30 billion over the coming decade. The tax is unpopular with Democrats as well as Republicans, and has been the subject of an intense lobbying effort by the influential medical devices industry.

* Eliminate government health care contributions to congressmen, their staff, and White House employees who now must purchase coverage through the Affordable Care Act. This is based on a proposal by Sen. David Vitter (R-LA), who says it’s only fair that these federal officials get their health insurance without any special government subsidies.

* Block Democratic efforts to delay a $63 per head levy on existing health insurance policies provided by employers and labor unions. The so-called “belly-button tax” is intended to stabilize the insurance market in anticipation of sicker stock from previously uninsured people flooding insurance risk pools. Republicans criticize the delay as a special favor to organized labor.

Sen. Chuck Schumer (D-NY) lashed out at Boehner on the Senate floor, saying that he had thrown another obstacle in the path toward compromise. “Speaker Boehner decided to light a match and throw it on the gasoline already all over the place,” he said. 

The White House wasted no time in rejecting the latest emerging House GOP proposal. 

“The president has said repeatedly that members of Congress don’t get to demand ransom for fulfilling their basic responsibility to pass a budget and pay the nation’s bills,” the White House said in a statement. “Unfortunately, the latest proposal from the House Republicans does just that in a partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first place.”

But more importantly, the House Republican plan contains features that could hamstring future budget negotiations with President Obama and Senate Democrats.

Just a week ago, Boehner urged the White House and congressional Democrats to simply begin comprehensive talks on spending and entitlements in return for an end to the government shutdown.

Now, in their effort to preempt the Senate, the House Republicans are issuing a plan that would forbid the Treasury Department from using “extraordinary measures” to stave off a default beyond early February.

Their plan also does not require a return to “regular order,” which would form a bicameral committee to reconcile the different budgets in the House and Senate. This negotiating framework—or lack thereof—all but guarantees that the harsh ideological differences will not be settled until one sides completely backs down.

Boehner and House Majority Leader Eric Cantor (R-VA) told reporters they are still finalizing the details of their latest plan. But leaks about their intentions quickly developed during a Tuesday morning meeting of the House GOP Conference in the basement of the Capitol.

Boehner still seems to be looking for a way to appease dozens of hardliners in his caucus, many of who dined Monday night with Sen. Ted Cruz, a Tea Party firebrand from Texas who helped force the shutdown by demanding that Obamacare be gutted.

The speaker and other congressional leaders repeatedly invoked the need for “fairness” in the Affordable Care Act, which is code for ramming through provisions including the elimination of health care government subsidies for congressmen and staff with political jobs.

But the GOP maneuvers on Tuesday morning create a combustible situation, since the government enters a red zone on Thursday when Treasury Secretary Jack Lew says the government will begin running short on cash to pay its creditors and to keep all federal agencies and programs fully running.

The possibility of a first-ever U.S. default could rock the economy back into a recession and do damage several orders of magnitude greater than any of the alleged benefits of suspending parts of Obamacare in the House Republican plan.

Wall Street executives and Christine Lagarde, the chief of the International Monetary Fund, have warned of a “catastrophic” international economic reaction to a U.S. default on its obligations.

“Why are they doing this to the American people, sabotaging a good faith effort coming out of the Senate?” House Minority Leader Nancy Pelosi (D-CA), said at a news conference. “This Republican sabotaging of any effort to move forward is a luxury this country just cannot afford.”