October 15, 2013

Debt Ceiling Deal ‘Still Far Off,’ Says White House

House GOP Leaders pull bill they floated Tuesday morning; House aide tells WSJ GOP leaders making changes to bill

House Speaker John Boehner, left, and Senate Majority Leader Harry Reid. (Photo: AP) House Speaker John Boehner, left, and Senate Majority Leader Harry Reid. (Photo: AP)

With only two days left before the Treasury runs out of authority to borrow money, White House Press Secretary Jay Carney said Tuesday afternoon that a deal to raise the debt ceiling and end the government shutdown was “still far off.”

Carney said during his daily briefing that while the administration was “encouraged by the progress we’ve seen in the Senate … we’re far from a deal at this point.”

House Republican leaders pulled the plug Tuesday afternoon on their own plan that they had announced only hours before. House GOP leaders said the plan they floated, which would deprive members of Congress, the president, the vice president and White House political appointees of government contributions when they buy health insurance under the Affordable Care Act’s new exchanges, would likely fail to muster enough votes.

House Speaker John Boehner, R-Ohio, said that House Republicans had made “no decisions about what exactly we will do." Said Boehner: “We’re trying to find a way forward in a bipartisan way that would continue to provide fairness to the American people under Obamacare.”

The Wall Street Journal quoted a House Republican aide as saying that leaders were making changes to the proposal after getting feedback from rank-and-file members. “Some members suggested specific changes on a handful of issues that would increase support, and leaders are discussing those suggestions now,” the aide told the Journal.

Senate Majority Leader Harry Reid, D-Nev., said the Senate had been “blindsided” by the House GOP plan. He called the plan “an extreme bill [that] is nothing more than a blatant attack on bipartisanship.”

Hopes were raised over the weekend that a deal was at hand as Reid and Minority Leader Mitch McConnell, R-Ky., were attempting to reach an agreement. Reid said Tuesday that “the measure [that was] under discussion in the House is no part of what we’ve negotiated here in the Senate.”

Reid argued that the Republican bill would “make unacceptable, major changes to Obamacare.”

The Dow Jones Industrial Average was down more than 100 points in midafternoon trading.

Yale economist and recennt Nobel winner Robert Shiller told CNBC on Tuesday that the fight in Congress was "not necessarily bad for the stock market."

"The Republicans want rich people to keep the money," he said. "That has to be good for the stock market. Of course, bad for the stock market is the reputational loss that this country could lose. So it's a wash."

Political Strategist Greg Valliere of Potomac Research opined in his Tuesday morning commentary that the worst-case scenario would be if “Boehner decides he can’t abandon his troops – and, potentially, his job – [and] the House attaches anti-Obamacare provisions to the Senate bill or funds the government for only a few weeks, beginning a round of legislative ping-pong that could last for days, well past the Oct. 17 deadline.”

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Check out Robert Shiller: Budget, Debt Fights a ‘Wash’ for Markets on ThinkAdvisor.

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