New GOP shutdown/debt plan, but no agreement yet

(AP) New GOP shutdown/debt plan, but no agreement yet
By DAVID ESPO
AP Special Correspondent
WASHINGTON
Efforts accelerated in Congress on Friday to keep the U.S. Treasury from defaulting as early as next week and to end the partial government shutdown that stretched through an 11th day. At the White House and Capitol, President Barack Obama and top aides consulted repeatedly with both House and Senate Republicans.

“Let’s put this hysterical talk of default behind us and instead start talking about finding solutions,” said Senate Republican Leader Mitch McConnell of Kentucky.

There was no shortage of suggestions. Yet there also was no evidence of agreement to end crises that have caused financial markets to shudder and interest rates to rise, while closing some federal offices and sending 350,000 workers home on furlough, without pay.

Senate and House Republicans each offered to reopen the government and raise the $16.7 trillion debt limit _ but only as part of broader approaches that envision deficit savings, changes to the health care law known as Obamacare and an easing of across-the-board spending cuts that the White House and Congress both dislike. The details and timing differed.

“We’re waiting to hear” from administration officials, said House Majority Leader Eric Cantor.

While the impact of the shutdown varies widely, lawmakers seemed to be taking care of their own needs.

The members-only House gym remained in operation, and enough Senate staff was at work to operate the aging underground tram that ferries senators and others from the Russell Office Building to the Capitol a short distance away.

Obama met at the White House for more than an hour with Senate Republicans, the last in a series of four presidential sit-downs with the rank and file of each house and each party.

He has said repeatedly in recent weeks that he is willing to negotiate with Republicans on budget, health care or other issues, but only after the government is reopened and the threat of default eliminated.

The White House seemed to wobble on that point on Thursday, until Senate Majority Leader Harry Reid, D-Nev., emphatically reinforced that it was his view, too.

Republicans have just as insistently demanded that Obama negotiate with them in exchange for passage of legislation that both sides agree is essential.

That left the White House and congressional leaders looking for a way to negotiate their way out of an impasse without appearing to negotiate _ with the health of the nation’s economy dependent on their political dexterity. The administration says the government will bump up against its borrowing limit next Thursday, raising the specter of an unprecedented default.

At Obama’s meeting with Senate Republicans, Sen. Susan Collins of Maine laid out a proposal to raise the debt limit until the end of January, reopen the government and take a slice out of the health care law.

Under a proposal she and other GOP senators have been developing, a medical device tax that helps finance the health care law would be repealed, and millions of individuals eligible for subsidies to purchase health insurance under the program would be subject to stronger income verification.

At the same time, federal agencies that have been affected by across-the-board cuts would gain greater flexibility in the use of their remaining funds.

Any other items could be negotiated later.

Back at the Capitol, Collins said Obama said the proposal “was constructive, but I don’t want to give the impression that he endorsed it.”

For their part, House Republicans previewed a different approach in a late-night meeting Thursday with White House officials.

It, too, would raise the debt limit and avoid a default, as part of a framework that could include easing the across-the-board cuts in exchange for reductions that Obama has supported in the past in benefit programs. That plan, too, seeks changes in Obamacare.

White House officials declined to comment on that proposal, although administration aides were checking with key Democrats in Congress to gauge their reaction.

The White House and Republicans have negotiated almost $4 trillion in deficit savings in the past three years. But little of that has come out of benefit programs such as Medicare and Medicaid, and the Republican proposals seemed an attempt to open up that part of the budget to scrutiny.

Obama has proposed raising the cost of Medicare for better-off seniors, a $50 billion item over a decade. He has also backed higher fees under TRICARE, which provides health care for nearly 10 million active-duty and retired military personnel, retirees, reservists and their families, as well as increases in the cost of retirement benefits for federal workers.

After four years of trillion-dollar deficits, the 2013 federal budget shortfall is expected to register below $700 billion, but Republicans say more cuts are essential. At the same time, the nation’s debt is rising inexorably _ the reason for the effort to raise borrowing limit to cover it. The debt was $10.6 trillion when Obama took office during the worst recession in decades, and has grown by $6.1 trillion in the years since.

The House Republicans’ plan was outlined in the Thursday night White House meeting that included senior aides to Obama as well as to House Speaker John Boehner and Cantor, several hours after Obama met with top Republicans.

The discussions unfolded as the House voted 248-176 to resume funding for nuclear arms research and security despite the broader shutdown. It was the latest GOP bill aimed at reviving popular programs _ and the latest to face swift demise in the Senate, where Reid has rejected nearly all bills that fall short of fully reopening the government.

___

Associated Press writers Julie Pace, Jim Kuhnhenn, Andrew Taylor, Alan Fram and Donna Cassata contributed to this report.