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Confusion and Setbacks Sweep Congress as Hours Count Down Towards a Debt Default

October 16, 2013
by Mark Hagland
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The situation in Congress remained highly fluid on Tuesday evening, as cross-currents and setbacks hit the federal government shutdown/debt ceiling crisis
Late Tuesday evening, Oct. 15, currents and cross-currents swept Capitol Hill as the federal government remained shut down and the nation lurched towards a potential first-ever debt default, with healthcare reform still at least marginally in play in negotiations taking place in the U.S. Senate, following a setback earlier in the day in the House of Representatives.
As Jonathan Weisman reported in The New York Times, "With the federal government on the brink of a default, a House Republican effort to end the shutdown and extend the Treasury's borrowing authority collapsed Tuesday night as a major credit agency warned that the United States was on the verge of a costly ratings downgrade. After the failure of the House Republican leadership to find enough support for its latest proposal to end the fiscal crisis, the Senate's Democratic and Republican leaders immediately restarted negotiations to find a bipartisan path forward."
A report in the Washington Post by Lori Montgomery and Paul Kane published late in the evening on Tuesday put it this way: "A campaign to persuade House Republicans to lift the federal debt limit collapsed in humiliating failure Tuesday, leaving washington careering toward a critical deadline just two days away, with no clear plan for avoiding a government default. Senate leaders," the Post reporters wrote, "quickly moved to pick up the pieces, saying they were 'optimistic' that they could reach agreement to advance an alternative proposal that would raise the debt limit through Feb. 7 and end a government shutdown, now in its third week. But," they added, "it was unclear whether a deal struck by Senate Majority leader Harry m. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) could pass the Senate before the Treasury Department exhausts its borrowing power Thursday."
Healthcare reform, in the form of the Affordable Care Act, remained at least partly in play, in a legislative drama that began when House Republicans forced a government shutdown on Oct. 1 over their demand that the ACA be defunded. The Post's report Tuesday night said this: "Republicans who shut down the government in a bid to undermine President Obama's healthcare program would win no major changes to the law. But they would get additional safeguards to ensure that people who receive subsidies to buy health insurance are in fact eligible."
Further, the Post report noted, "Democrats dropped their demand to delay a new tax on existing health insurance plans, a change intended to benefit organized labor. And republicans back off their push to deny the the Treasury Department flexibility to manage the nation's books after Feb. 7, an aborted attempt to ensure that the short-term extension of the debt limit doesn't somehow drag on into the spring."
One element in the ACA that has shifted constantly is the question of whether a final agreement between congressional Republicans and Democrats might or might not include a two-year delay in the implementation of the medical device tax. As of late Tuesday evening, that element appeared to have been left behind. But a requirement that those individuals receiving health insurance subsidies for participating in the health insurance exchanges receive eligibility verification appeared to have been inserted in the still-evolving Senate agreement.
More broadly, as of late Tuesday evening, it did not appear that any of the core health insurance-related provisions in the ACA were in play in the Senate negotiations.
A number of scenarios remained possible. Robert Costa, a CNBC political analyst, told MSNBC's Steve Kornacki late Tuesday evening that his sources within the Republican House leadership say that House Speaker John Boehner (R-Oh.) might either allow a vote on the deal being brokered in the Senate, or he might choose to allow a simple vote on raising the debt ceiling that would not simultaneously reopen the government at the same moment. Political reporters and commentators Tuesday evening agreed that developments could proceed very rapidly on Wednesday, Oct. 16, given the potential for the federal government to default on its debt, possibly beginning on Thursday, Oct. 17.
Healthcare Informatics will continue to update its readers as this rapidly developing story moves forward in the next few days.