Senate Minority Leader Mitch McConnell, R-Ky., publicly threw his support Sunday behind a bipartisan proposal to raise the federal debt ceiling that had been gaining steam in the Senate on Friday before it was rejected by Democrats on Saturday.
The proposal, by Sen. Susan Collins, R-Maine, would raise the debt limit until Jan. 31 and fund the government through the end of March, while making only minor changes to the federal health-care law.
Democrats want to extend the debt ceiling for a longer period of time and pass a shorter-term spending bill, one that would require broad budget talks before a new round of automatic budget cuts takes effect in January.
In a statement, McConnell said Collins’s plan would “reopen the government, prevent a default, provide opportunity for additional budget negotiations around Washington’s long-term debt and maintain the commitment that Congress made to reduce Washington spending” in the 2011 debt deal.
He called that the “law of the land,” a reference to the Democrats’ frequent insistence that changes cannot be made to the health-care measure to resolve the current crisis because it, too, has already become law.
“It’s time for Democrat leaders to take ‘yes’ for an answer,” McConnell said.
In the first sign of action Sunday, Senate Majority Leader Harry M. Reid, D-Nev., and McConnell, R-Ky., spoke by phone, according to a Democratic aide. The aide characterized the call as “cordial but inconclusive,” with both sides dug in on their positions.
McConnell’s statement came after the Senate convened a rare Sunday session, which Reid opened by saying he and McConnell are continuing talks to raise the debt ceiling and reopen the government.
“We’re in conversation today,” Reid said on the Senate floor. “I’m confident the Republicans will allow the government to open and extend the ability of the country to pay its bills. And I’m going to do everything I can throughout the day to accomplish just this.”
With the two sides stuck over whether to leave in place deep automatic spending cuts known as sequestration, Reid stressed that Democrats have agreed to leave the reductions in place into November and suggested they would be open to allowing them to remain in place longer. He noted that was part of a continuing resolution to fund government that has been adopted on a bipartisan basis in the Senate but blocked in the House.
But another round of cuts is set to take effect in January. Democrats have balked at a deal proposed by Senate Republicans that would have opened broader budget talks in coming months but might have allowed that hit to occur in January.
“There was one conversation on the Sunday shows today that said we were trying to break the caps set in the budget act,” Reid, referring to the 2011 Budget Control Act that put sequestration in motion. “We voted differently than that. We voted to extend the [continuing resolution] until November 15. Not a word about breaking caps.”
Senate leaders began negotiations Saturday aimed at reopening federal agencies and avoiding a government default after other efforts to end Congress’s impasse had crumbled in the previous 48 hours.
Reid and McConnell took over the talks, which led nowhere in recent days. House Speaker John A. Boehner, R-Ohio, acknowledged early Saturday that his discussions with President Obama had collapsed and that the Senate was the last hope to avert a financial disaster.
McConnell and Reid held an hour-long meeting in Reid’s office with two close Senate allies and left the Capitol by mid-afternoon. Late Saturday night, neither side cited any progress and Republicans reported that Democrats were dug in on their demand to increase funding for federal agencies.
During the fiscal crises that have gripped Capitol Hill over the past five years, each resolution and compromise came after Senate leaders picked up the pieces of failed efforts between the White House and the House.
Many of the seven Republicans who appeared on Sunday morning political talk shows said that any deal to end the government shutdown and address the debt ceiling can’t include repealing the spending caps put in place under sequestration.
The president will receive a briefing Sunday afternoon from members of his senior staff, including Chief of Staff Denis McDonough and Deputy Chief of Staff Rob Nabors, about the impact of the government shutdown, according to a White House official.
In a telephone conversation with House Minority Leader Nancy Pelosi, D-Ca., Obama again stressed the need for a “clean” debt limit increase and a “clean” continuing resolution to end the government shutdown, according to the White House. After that, they were willing to negotiate a longer-term budget solution, the White House said.
The slow-moving talks appeared to nix earlier hopes that at least an outline for a deal could be in place before the financial markets opened Monday, as some senior senators suggested when momentum seemed to be building toward Collins’s plan.
Senate Republicans — already stunned by Boehner’s inability to pass anything in the House — grew furious about Reid’s attempt to get relief from the sequester because they considered Collins’ plan the fastest path to a deal.
“This thing has gotten to the point of a real crisis for the country, and everybody keeps changing their position based on politics,” Sen. Lindsey O. Graham, S.C., said after a long huddle on the Senate floor with McConnell and other Republicans.
It was a dramatic turnabout from Thursday morning, when Boehner’s leadership team signaled that it would support increasing the debt ceiling until almost Thanksgiving with the only demand being that Obama negotiate over a broader budget framework in the interim. With pressure on the debt issue appearing to ease, financial markets staged their biggest rally in a month.
The president, however, rejected Boehner’s offer because it did not address reopening the government, which has been closed since Oct. 1. Instead, the White House grew interested in the Senate talks over Collins’s plan because of its longer debt-ceiling window. According to the administration, Treasury Secretary Jack Lew will run out of options for juggling the nation’s books after Thursday, and by the end of the month, the Treasury will run out of cash to pay the government’s bills.
Collins, along with GOP Sens. Kelly Ayotte, N.H., and Lisa Murkowski, Alaska, worked with Democrats to draw up a 23-page draft that would have ended the shutdown and funded federal agencies for six months at current spending levels. It would have left intact the sequestration cuts scheduled to hit Jan. 15 but would have given agency officials flexibility to decide where the reductions should occur.
In addition, the proposal would raise the debt limit through Jan. 31, setting up a path for the two sides to have broad budget talks to try to tackle the issues of taxes and entitlement reform.
In exchange, Republicans sought tweaks to Obama’s Affordable Care Act, including a two-year delay of a 2.3 percent tax on medical devices that is unpopular in both parties.
Reid and McConnell met with two allies who had been working with Collins — Sens. Charles E. Schumer, D-N.Y., and Lamar Alexander, R-Tenn. — when Reid rejected that plan, but the talks continued.
Democrats want a shorter extension of government funding so that they can try to press the Republicans, whose image has been battered in recent weeks, for more savings from the sequestration cuts in negotiations that would take place in the near term — rather than waiting until March, when the spending cuts will have taken effect.
In addition, Reid told reporters that he will make no concessions on the health-care law.
Niraj Chokshi, Lori Montgomery, Jackie Kucinich and Jeff Simon contributed to this report.