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Senate deal would open government, avert default - and restore back pay

Oct. 16, 2013 - 08:35PM   |  
The emergency fiscal deal being hammered out would reopen the government until Jan. 15 and raise the debt ceiling until Feb. 15 (Karen Bleier/AFP via Getty Images)
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WASHINGTON — Senate Democratic and Republican leaders on Wednesday announced an eleventh-hour deal to end a government shutdown and avert a federal debt default — and also lock in sequestration’s deep spending cuts.

The deal should allow both chambers of Congress to act on the legislation before the United States would hit a statutory limit that would leave it unable to borrow more funds to pay outstanding bills. Some analysts said a U.S. default would undermine national security by delaying military and intelligence workers’ pay and payments to defense contractors.

The emergency fiscal deal — hammered out by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., and backed by a 13-senator bipartisan group — would reopen the government until Jan. 15 and raise the debt ceiling until Feb. 15.

It also would require House and Senate leaders to appoint conferees on a 2014 budget resolution to set spending levels and reconcile the two chambers’ very different versions. Reid and McConnell adopted GOP priorities by including in their nearly final plan a $986 billion government-wide funding level preferred by Republicans.

The bill includes back pay for furloughed federal employees, said Matt Biggs, legislative and political director for the International Federation of Professional and Technical Engineers, citing congressional sources.

Sen. Susan Collins, R-Maine, who played an instrumental role in forging a deal said the Senate might take up the bill as soon as later Wednesday. The House also could vote on the measure on Wednesday.

The length of government funding was a demand of Senate Democratic leaders, who are in the early stages of a push to replace at least the 2014 round of sequester cuts.

Senior Democrats want to use the three-month period to begin negotiations with Republicans and the White House over other deficit-paring items that would replace or significantly lessen the 2014 round of defense and domestic sequestration cuts.

The No. 3 Senate Democrat, Chuck Schumer of New York, explains the Democratic leadership’s strategy this way: “Open up the government immediately for a period of time before the sequester hits and then have serious discussions where we might be able to undo the sequester.”

“I’m optimistic that could work,” Schumer said Sunday on CBS’ “Face the Nation” program.

Republicans, sources say, are skeptical. They worry that Democrats will use the budget conference and the coming debate about sequestration to undo those cuts and exceed federal spending caps put in place by the 2011 BCA.

Pentagon brass, industry officials and hawkish lawmakers want DoD to be granted sequestration flexibility because the first round of across-the-board cut hit operations and maintenance and procurement accounts hard

The three-month government funding timing sets up a likely bitter few months of talks about how the next year of across-the-board cuts to non-exempt defense and domestic accounts might be replaced by other deficit-paring items.

Senate Republicans fought hard during closed-door negotiations to ensure the temporary emergency fiscal legislation kept in place spending caps etched in stone by the 2011 Budget Control Act, the same law that set up sequestration.

McConnell made clear in a floor statement Wednesday announcing the last-minute deal that Republicans would continue that fight.

“We’re protecting the government spending reductions that both parties agreed to under the Budget Control Act, and that the president signed into law,” McConnell said. “That’s been a top priority for me and my Republican colleagues throughout this debate. And it’s been worth the effort.

“Some have suggested that we break that promise as part of this agreement,” McConnell said. “What the BCA showed is that Washington can cut spending. And because of this law, that’s just what we’ve done. … And we’re not going back on this agreement.”

Tea party darling Sen. Ted Cruz, R-Texas, who pushed House Republicans to force a government shutdown by insisting any legislation target President Obama’s signature health care law, told reporters he will not use procedural measures to delay action on the bill.

Collins was the unofficial leader of the group of 13. She said Reid and McConnell did not use all parts of the 13 senators’ plan, “but they took some parts of it verbatim.”

The deal means the full federal government could reopen in a few days, putting the entire US defense sector and national security apparatus back to work.

It also means defense contractors and employees will get paid once Obama signs the emerging legislation.

The Lexington Institute's Loren Thompson on Wednesday warned those payments could have been delayed as the Treasury Department muddled through making payments under a federal default.

It was not immediately clear whether the emergency legislation grants Pentagon leaders greater flexibility to implement sequester cuts, as many senior Democrats and Republicans hoped.

Collins, who had pushed hard for the inclusion of such language, said on the floor that senators were concerned about the cuts’ impact on the Defense Department. She did not directly address the language, saying only vaguely that "we were able to mitigate that to some extent."

Sen. John McCain, R-Ariz., one of the 13, called the last few weeks, which included House Republicans forcing a government shutdown over the health care law, “one of the most shameful” he’s seen in his long Senate tenure.

But he said the work the 13 senators did should help as Congress enters into a winter-long series of deadlines and crises.

“This isn’t the last crisis we’re going to go through,” McCain said on the Senate floor, “but I think we have the framework for the bipartisan [cooperation] the American people want.”

Editor’s Note: Check throughout the day for updates on the emerging Senate default-averting and shutdown-ending deal.

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