US Fiscal: The Fat Lady in the Wings

Published on October 16, 2013

It would be difficult to downplay what a damaging if not devastating debacle took place in the House last night. For Speaker John Boehner to be forced to pull the House bills to end the crisis at the last minute before it even went to the Rules Committee has left the House Republican Conference in near total disarray as a credible political factor.

All the momentum is back to the Senate where its two leaders, Majority Leader Harry Reid and Minority Leader Mitch McConnell, are briefing their respective caucuses on the terms of the deal they finalized last night after losing a day to Boehner’s last gasp efforts to lead with a House bill.

*** Speaker Boehner is in fact exploring this morning whether to push an HR bill written along the lines of the Senate agreement being worked out between Reid and McConnell through the House Rules Committee and to a House floor vote fairly quickly today before the Senate vote gets underway. ***

*** Moving a HR bill as the legislative vehicle, rather than waiting for a Senate-originated bill to come to the House, would shorten the procedural steps in the Senate to only one cloture vote before a final vote on the bill to end the crisis. It would also serve to politically isolate even further any defiant ploy by Texas Senator Ted Cruz or Utah’s Senator Mike Lee to delay a final Senate vote by blocking a unanimous consent to waive the remaining 30-hour of debate rule. ***

*** But either way, the crisis will soon be over barring the fat lady singing the final notes to its end. Even without Boehner’s possible last play, the Senate will still be able to push through a bill built around the Reid-McConnell agreement beginning later today, and depending on how the politics of the procedural steps play out, pass and send it to the House as soon as late tonight, or by Friday at the latest. We do expect the House to pass the final bill in a straight up or down vote, with a majority of Democratic votes. ***

The Next Few Days

The Reid-McConnell bill is still being built around the three-part core of the December 13 deadline for the bicameral conference committee’s longer term budget recommendations, mostly to deal with the sequester; the January 15 date for the CR at the current $986.3 billion spending level; and the February 7 extension to the debt ceiling.

In addition, the final trimmings of the amendments to satisfy a minimum of political demands for each side may be adjusted a bit after the caucus meetings. The only two that are important, the inclusions of agency flexibility to cope with the sequester spending cuts and that Treasury’s extraordinary powers to deal with the debt ceiling remain intact, and are both certain to be included in the final deal.

If Boehner does not move a bill with the Senate framework first, it will be interesting to see how much McConnell can or is willing to try and carve out concessions to give Boehner something, anything, to save some face in order to pick up Republican votes when the bill does comes to the House.

As we wrote in what seems ages ago yesterday morning (SGH 10/15/13, “US Fiscal: Convergence, But Deal before Weekend Unlikely”), the Senate could move its crisis-ending bill to a floor vote and over to the House as soon as the end of day today.

But that would depend on whether any Senators (i.e., Texas Senator Ted Cruz and Utah Senator Mike Lee, or what their fellow Republican Senators derisively refer to as the “crazy Cruz and lunatic Lee show” – see SGH 9/25/13, “US Fiscal: Cruz-ing to a Deepening Uncertainty”) object to the unanimous consent waiver of the 30-hour debate rule. That will come up twice, on the motion to precede vote, and then again before the final vote on the actual bill, meaning the potential of up to 60 hours of delays.

But if they do, they can only delay not stop the inevitable, and we suspect they will in fact back down.

And then, whether late tonight, tomorrow morning, or in a worst case, the weekend, the Senate bill reopening the government and the lifting the debt ceiling will be winding its way into the hands of the embattled House Speaker.

Boehner’s Last Play

The indications we have picked up is that Speaker Boehner has abandoned any plans to “ping-pong” any further amendments to a bill to end the crisis. It is not only that time has run out, but that the Republican House leadership has concluded, however reluctantly and bitterly, that there is simply no bill in any form that can muster at least 217 Republican votes. The conference is simply too torn apart.

And that, in turn, means whatever comes the House way from the Senate will be put to a up or down vote on the House floor. It will be passed with a majority of the 200 Democratic votes and anywhere from 20 to 100 or more Republican votes of their 232 majority.

As we noted, Boehner may in fact expedite the Senate bill by more than a day if he manages to send over a HR bill for the Senate to use as a faster legislative vehicle than a Senate-originated bill.

But we do think the crisis is essentially over.

The end of the crisis sometime this week has, of course, only put off to the turn of the year the larger, still unresolved differences over what to do with FY2014 budget spending levels and the sequester. The way the current deal is structured in three dates, it sets up a string of more potentially market rattling deadlines, enough to probably ruin the holiday season for most.

But whether the sequester will be traded away for entitlement reforms or tax reforms or a little of both will be taken up by the conference committee, whose members should be named soon after the political scars of this disastrous fight are at least partially healed.

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