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Q&A

Shutdown: Who will blink first?

Parties at stalemate in high-stakes fiscal game

– Democrats and Republicans in the Senate are trying to find a way to reopen the government – which has been partly shut down for two weeks – and avoid breaching a Thursday deadline to raise the federal debt ceiling. But they haven’t found one yet.

Q. What are they fighting over?

A. They are just trying to find a way for the government to open and to raise the debt ceiling. To do so, Republicans say they need something to save face. Democrats don’t want to make it seem like they are giving in too much.

Q. Are they close to a deal?

A. It’s hard to say. The deal that seemed to have the most potential Friday was a proposal by Sen. Susan Collins, a moderate Republican from Maine.

The proposal had a few basic parts:

•It would have opened the government and funded it through March 31.

•It would have raised the debt ceiling through Jan. 31.

•It would have made some minor modifications to the Affordable Care Act – including delaying a medical device tax that nobody likes anyway and greater scrutiny of the subsidies that go to low- and moderate-income people to help them buy health insurance.

•It would give agencies a little more flexibility to implement the across-the-board spending cuts known as sequester.

•It would set up budget negotiations with hope of finding agreement that would avoid another showdown before Jan. 31.

Though Collins’ idea drew the GOP leaders’ nod, Democrats have rejected it, leaving the Senate at an impasse.

Q. Why did Democrats reject the proposal?

A. It would seem to lock in the sequester.

The sequester received a lot of attention before it took effect. It was the result of another budget battle in 2011, and it basically forces deep defense and domestic spending cuts, year-after-year, to rein in the deficit. To many Democrats, the sequester is toxic because it cuts into priorities like education and research and development.

The next round of sequester cuts is set to take place Jan. 15. If Collins’ plan passed, the cuts would kick in and Democrats could do little about it.

Democrats also don’t want another debt ceiling battle in January; they’d like the debt ceiling to be increased for a longer period.

Q. So how long do lawmakers have to figure out a solution?

A. Not long. Thursday is the day when the government no longer can borrow any money and basically will be running on fumes.

After the debt ceiling deadline is breached, the Treasury Department might have to delay or suspend Social Security checks, food stamps and tens of billions of dollars in payments.

It could take a few days – or maybe a week or two – but soon enough there would be major problems.

Treasury would have only daily tax receipts to pay for the government – which amount to only 70 cents for every dollar of federal spending. And that could cause financial market chaos and a recession.

Q. So, where do we stand?

A. As we said earlier, at an impasse. But in the Senate, both sides are still hopeful that they can find a solution early this week.

One easy path to a solution would be for Republicans to agree to roll back part of the sequester – either unilaterally or in exchange for something else, like changes to entitlements.

If that’s not possible, Democrats might push to fund the government for a shorter period – say until Thanksgiving or early January. That would force lawmakers to try to find a solution to the sequester before the next round of cuts take effect.

Democrats are hopeful they could force a sequester replacement because next year, the sequester happens to cut defense spending more than domestic spending, which worries some key Republicans.

The problem is that many in the GOP see the sequester as a historic win for cutting spending.

Q. OK, let’s say the Senate does find a solution. Can it get through Congress and to the president before the debt ceiling deadline?

A. Possibly, but it will be tough. For starters, any senator can object to consideration of a bill. And if that happens, it takes a few days to force a vote.

And nobody knows what will happen in the House. Many expect any Senate agreement to pass with the support of most Democrats and some Republicans, but it’s hard to know what kind of vote House Speaker John Boehner, R-Ohio, will allow.

Q. So if lawmakers solve this, might we be doing this all over in a couple of weeks or months?

A. It depends on the length of any final agreement. But, yep, we might.

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