WASHINGTON – What started as a mad dash to strike a deal to lift the federal debt limit slowed to a crawl over the weekend as stalemated Senate leaders waited nervously to see whether financial markets would plunge this morning and drive the other side toward compromise.
Republicans seemed to think they had more to lose. After talks broke down between President Barack Obama and House leaders, GOP senators quickly cobbled together a plan to end the government shutdown – now entering its third week – and raise the $16.7 trillion debt limit. Senate Minority Leader Mitch McConnell, R-Ky., then asked Majority Leader Harry Reid, D-Nev., to elevate negotiations to the highest level.
On Sunday – with the Treasury Department due to exhaust its borrowing power in just four days – Reid was wielding that leverage to maximum advantage. Rather than making concessions that would undermine Obamas signature health care initiative, as Republicans first demanded, Democrats are now on the offensive and seeking to undo what has become a cherished prize for the GOP: deep agency spending cuts known as the sequester.
Reid and McConnell spoke only once Sunday, a telephone call in the afternoon, aides said. As he closed a rare Sunday session of the Senate, Reid characterized the conversation as productive and substantive.
Im optimistic about the prospects for a positive conclusion to the issues before this country today, he said.
But the shift in focus away from the imminent threat of a first-ever default on the U.S. debt sparked outrage among Republicans and alarm among the worlds financial leaders, meeting this weekend in Washington.
International Monetary Fund managing director Christine Lagarde warned on NBCs Meet the Press that a failure by the United States to make scheduled payments to investors would mean massive disruption the world over. And we would be at risk of tipping yet again into a recession.
Republicans, meanwhile, said any agreement to back away from the sequester cuts would be opposed by GOP senators and doomed in the Republican House. I just cant imagine how that has any possibility of becoming law, said Sen. Bob Corker, R-Tenn.
Democrats said they objected to a debt-limit plan developed by Sen. Susan Collins, R-Maine, because it would permit the cuts to stay in place through March, allowing another round of sequester cuts to hit Jan. 15.
McConnell issued a statement throwing his support for the first time behind the Collins proposal, calling it a bipartisan plan brokered with five other GOP senators and six senators who caucus with Democrats.
Sen. Joe Manchin, W.Va., one of the Democrats working with Collins, defended the proposal on Fox News Sunday as having a little bit of move for everybody. In a divided government, you cant have it all your way.
Soon after McConnells statement appeared, however, the Collins collaborators hustled into Reids office just outside the Senate chamber. Some of them were still inside when a joint statement was issued on behalf of Sens. Heidi Heitkamp, D-N.D., Mark Pryor, D-Ark., Amy Klobuchar, D-Minn., Angus King, I-Maine, and Joe Donnelly, D-Ind., responding to Senator McConnells comments.
We have been involved in productive, bipartisan discussions with Senator Collins and other Republican senators, the statement said, but we do not support the proposal in its current form.
An hour later, an update appeared adding Manchins name. NOTE, it said: Senator Manchin was unavailable when the original statement was sent out.