In what can at best be described as a "fluid" situation, one in which according to initial press reports [11]the White House and the GOP couldn't even compromise on what had actually been said, it seems that while both sides are eager to move on with the debt ceiling extension, the GOP is still hoping in trying to preserve some political capital, of which it will be left with virtually nil if it caves to every last demand by the democrats, namely "reopen the government and then we can negotiate" losing all leverage in the process. And a loss of all capital and leverage is precisely what the GOP will "achieve" according to Politico, which clarified that "House Republicans told Obama that they could reopen the federal government by early next week if the president and Senate Democrats agree to their debt-ceiling proposal" - a proposal which Obama has already said he would accept. In other words, full capitulation by Boehner appears imminent. Politico adds: "President Barack Obama and House Republicans clashed in a meeting Thursday afternoon over how soon the government can be reopened, even as the GOP offered to lift the debt limit for six weeks, according to sources familiar with the session. Aides will continue the discussion through the night to see if they could find common ground on how to move forward on the debt limit and government funding."
Here is the day in Washington in 2 minutes (via WaPo):
More from Politico [12]:
Obama repeatedly pressed House Republicans to open the government, asking them “what’s it going to take to” end the shutdown, those sources said. The meeting was described by both sides as cordial but inconclusive. Sources described the meeting without attribution, because the meeting was private.
Speaker John Boehner (R-Ohio) described the Republicans’ process as being two steps: passing the debt ceiling bill, and then open a broad budget conference before the government can be reopened.
Rep. Paul Ryan (R-Wis.) told Obama, Vice President Joe Biden and Treasury Secretary Jack Lew that this was a “good-faith” effort by Republicans. Ryan said both sides should “put their guns back in their holsters” — a bid to reach an agreement to avoid default, re-open the government and start broader budget talks.
Speaker John Boehner (R-Ohio) described the Republicans’ process as being two steps: passing the debt ceiling bill, and then open a broad budget conference before the government can be reopened.
Rep. Paul Ryan (R-Wis.) told Obama, Vice President Joe Biden and Treasury Secretary Jack Lew that this was a “good-faith” effort by Republicans. Ryan said both sides should “put their guns back in their holsters” — a bid to reach an agreement to avoid default, re-open the government and start broader budget talks.
“We had a very useful meeting,” Majority Leader Eric Cantor (R-Va.) said, upon returning from the White House Thursday evening. “It was clarifying I think for both sides as to where we are and the takeaway from the meeting was, our teams are going to be talking further tonight, we’ll have more discussion, we’ll come back to have more discussion. The president said that he would go and consult with the administration folks and hopefully we can see a way forward after that.”
A senior House GOP aide said Obama “did not say yes or no to House Republicans’ offer.” Both sides are continuing talks tonight, according to the aide.
Here are the earlier statements by both the White House press office:
The President had a good meeting with members of the House Republican Leadership this evening; the meeting lasted approximately an hour and a half. The President, along with the Vice President, Treasury Secretary Lew, Denis McDonough and Rob Nabors listened to the Republicans present their proposal. After a discussion about potential paths forward, no specific determination was made. The President looks forward to making continued progress with members on both sides of the aisle. The President’s goal remains to ensure we pay the bills we’ve incurred, reopen the government and get back to the business of growing the economy, creating jobs and strengthening the middle class
And from Boehner's press secretary Brendan Buck:
This evening in the Roosevelt Room, the leaders laid out the House proposal to temporarily extend the debt limit, formally appoint budget negotiators, and begin immediate discussions over how to re-open the government. No final decisions were made; however, it was a useful and productive conversation. The President and leaders agreed that communication should continue throughout the night. House Republicans remain committed to good faith negotiations with the president, and we are pleased there was an opportunity to sit down and begin a constructive dialogue tonight.
There are some additional considerations now that as Bank of America accurately predicted, defunding Obamacare is not even close to being part of the negotiation (which was always the dealbreaker). From Stone McCarthy [13]on the next steps:
- The House GOP proposed a six-week increase in the debt limit, which would expire on November 22. House Republicans want to permanently do away with the Treasury's ability to tap "extraordinary measures" to create headroom under the current debt limit.
- The House GOP wants the debt limit increase to be a precursor for bipartisan talks on a longer-term budget deal that tackles entitlements and tax reform. We don't know whether the two sides have to agree to any predetermined outcome for the committee as a condition for getting the debt limit increase. Based on earlier reports, it sounded like the size of any debt limit increase after November 22 would depend on the size of the deficit reduction package.
So if the committee doesn't produce a deal, and the Treasury can't use extraordinary measures, November 22 would be the new October 17.
- House Republicans don't seem to be addressing the government shutdown as this point. According to some accounts, ending the shutdown would depend on the negotiations of the new committee. That would probably be a non-starter for President Obama, and Senate Majority Leader Reid said he would not participate in budget negotiations while the government remains shut down.
- Senate Republicans are pursing their own strategy, proposing legislation that would fund the government at sequestration levels for a year, increase the debt limit for as long as the months, and repeal the medical device tax that is part of the Affordable Care Act.
Bottom line: in all the chaos, the GOP's will desperately try to salvage something out of this mess by saying that they at least got the president to "negotiate", while the democrats will get a reopened government, a debt ceiling extension, first temporary and then permanent, and a return to the Paul Ryan rhetorical masterpiece of an exercise (which as we said yesterday [14]is the fallback mythical "Grand Bargain" plan to go back to a broad strokes negotiation that addresses and solves nothing) to fix the sinking ship that is the US welfare state, which will go very quickly absolutely nowhere.
All the while, simply because the Fed is monetizing the debt and thus enabling Congress to continue its profligate ways, thanks to ongoing low rates, absolutely nothing will change.