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Continued: Closing in on shutdown and debt limit deal: Democrat Reid and Republican McConnell optimistic

  • Article by: DAVID ESPO , Associated Press
  • Last update: October 15, 2013 - 5:55 AM

One conservative with a seat at the GOP leadership table, Oklahoma Rep. James Lankford, said that based on what he had been told, the emerging package contained no policy victories for his party. As for raising the debt limit until February, he said, "That's a lot of dollars."

In addition to other elements of any deal, the two Senate leaders are expected to announce that House and Senate negotiators will seek a deficit-reduction agreement that could ease or eliminate a new round of automatic federal spending cuts scheduled to begin in January. While the current round of these cuts fell on both domestic programs and the military, the new reductions would hit primarily the Pentagon.

Democrats were resisting a Republican-backed proposal to suspend a medical device tax that was enacted as part of the health care law.

The officials spoke on condition of anonymity, saying they were not authorized to comment on the private discussions.

The president and a wide array of economists, bankers and politicians in both parties — at home and backed by world leaders — have all warned that default could have catastrophic consequences for both the domestic and global economies.

The doubters alternatively say no default will occur or that if it does, it won't be the calamity that others claim.

But after holding center stage for much of the current impasse, there was little doubt that they had been shunted aside as Reid and McConnell worked toward an agreement.

The prospect of a default and the possibility of a follow-on recession largely overshadowed the partial government shutdown that has furloughed 350,000 federal workers. Government research labs have been affected, veterans' services curtailed and much of the Occupational Safety and Health Organization shuttered.

With federal parks off-limits to visitors, the impact on tourism prompted several governors to petition Interior Secretary Sally Jewell successfully to permit the states to finance some re-openings.

The shutdown began on Oct. 1, at the beginning of the budget year, after the House adopted a strategy of conditioning broad federal spending legislation to a proposal to starve the three-year-old health care law of funding.

The president and Democrats refused, and the bruising struggle began, merging quickly with the fast-approaching deadline for a debt limit increase.

In the two weeks since, public opinion polls have charted a steady decline in Republican approval ratings, and an increase in the view that the party's lawmakers are acting out of political motivation.

The shutdown has proved problematic for the GOP in the Virginia governor's race, which is on the ballot this fall. Public opinion polls show the Democrat, Terry McAuliffe, ahead of Republican Ken Cuccinelli, who is caught between tea party supporters on the one side and the public's general unhappiness on the other, magnified by the large presence of federal workers in the state.

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