Rather than keep posting individual items throughout the day, this will be the Business Insider Politics live-blog of the FY 2011 Federal Budget negotiations.
We’ll keep posting until we get to some sort of resolution. So here we go:
Saturday morning update: The great “shut show” is over. A deal to cut $38 billion from the 2011 Federal budget has been cut. Details here. As Washington Post columnist Dan Balz correctly notes, the “shut show” made both sides look very bad.
Analysis: Balz is too kind.
Final update: The National Journal has a report on the wire that suggests a tentative agreement has been reached on the 2011 budget. The “outline” of the deal is being reviewed at The White House.
Here’s the lead:
The likelihood of a war-time federal government shutdown—the first in American history—diminished dramatically on Friday night as all parties began reviewing, with the goal of approving, a broad array of cuts and a short-term bill to keep the government operating while the details are put into legislative language for full congressional action next week.
While leadership staff insist there is no deal yet, that caution belies significant progress in narrowing long-standing differences and the widening assumption in both parties that a shutdown will be averted and all that remains unknown is the precise procedural steps that will walk everyone back from the abyss.
The Shut Show is shutting down. As are we.
Analysis: The prospect of raising the debt ceiling, which seemed daunting a month ago, now seems like Mt. Everest in a blizzard.
Update #21: Majority Leader Harry Reid is now scheduled to hold a press conference (or at least a briefing) at 8pm (Eastern). So we should know at that point whether the shutdown is on or off.
The most senior conservatives in the United States Senate are calling on Speaker Boehner to cut a deal and move on. But he seems weirdly locked in. Senate Majority Leader Reid is not moving one inch from where he now stands. He has no reason to do so. So unless Boehner moves, the government will shut down.
Analysis: Recall them all.
Update #20: When do you know it’s time to do the deal and declare “victory?” If you’re a Republican, it’s when Oklahoma Senator Tom Coburn says: “do the deal.” He said that a bit earlier today.
Analysis: It’s closing time.
Update #19: Mike Huckabee, the front-runner for the 2012 GOP presidential nomination, is urging Republican House members to cut a deal and move on.
Smart move by Huckabee. He gets to be one of the adults, he gets to compliment Boehner and company for fighting the good fight and he stakes out the political high ground first amongst the top-tier 2012 GOP candidates. “Don’t worry about the skirmish,” he’s saying, “worry about the war.”
Analysis: Huckabee plays the budget battle perfectly.
Update #18: A slight momentum shift back to some kind of deal being worked out, as various agents of both parties hit the cable news chat shows for interviews.
Democrats continue to relentless pound away at the Planned Parenthood talking point, while Republicans stick with their “cut spending” mantra. In the scheme of things, the proposed cuts are a pin dot, but never mind about that.
The White House continues its media silence, trying to protect its “grown-up” pose, while the children fight it out. We’re seven hours away now and it’s clear that Harry Reid is not going to blink. The Democratic Party calculation is that a shutdown will hurt the Republicans more than it will hurt them. Sen. Reid appears to believe this wholeheartedly.
So, if that is in fact the case, then there’s no downside risk for the Democratic Party if the government shuts down. They win if it does (the GOP gets blamed) and they win if it doesn’t (the GOP had to cave to get a deal done).
Analysis: The Republicans picked the wrong fight.
Update #17: This thing is beginning to deteriorate badly. The two sides will soon trot out some practice squad players to discuss the Planned Parenthood imbroglio. We won’t cover that because it will just be a rehash of what Speaker Boehner and Leader Reid have already said.
The press, which began the day thinking that a deal would be done today, is now thinking they’ll have to work through the weekend. The cable TV types were, like Speaker Boehner, looking forward to watching The Masters this weekend. Now they’ll have to gasbag all weekend on the tube. And they’ve used up all their bon mots. So they’re pissed.
The good news for the Democrats is that the Republicans will be blamed.
Analysis: GOP likely to get hammered on TV chat shows this weekend.
Update #16: Speaker Boehner’s mood has soured considerably. He was counting on all this being wrapped up by mid-afternoon so he could break out the bottle, light up a smoke and watch 3 hours of The Masters on ESPN in his office.
Boehner loves Augusta. Played it a number of times as a guest of former Congressman Amory Houghton (R-NY), who was once the CEO of Corning Glass and remains a much-beloved figure among Washington veterans. And Boehner loves watching The Masters on TV, since he can talk about how he played this whole in that way and that hole in this way.
Boehner just loves golf, basically. And he’d much rather be watching it on TV than watching Harry Reid give him the finger every three hours.
Analysis: This deal isn’t getting done.
Update #15: Senator Reid continues to hammer away at the Republicans on the Planned Parenthood issue. He seems to be pushing Boehner away from a deal. Here’s his statement (courtesy of The National Journal):
The House leadership with the Speaker have a very clear choice to make. They don’t have much time to make that choice. They can keep their word and significantly cut the federal deficit or they can shut down America’s government over women’s access to health care. If that sounds ridiculous, it’s because it is ridiculous.
We all know the federal budget is very complex, but the choice here is a simple choice. A lot of cuts in our proposal were tough choices, very difficult to make. The choice though should be very easy. We use their word rider around here a lot lately and now it’s become plural, riders. Let’s remember what’s really riding on the proposals that we have here. If the government shuts down over access to, for example, cancer screenings, our fragile economy will really be hurt. Let’s remember that in five weeks the GDP would drop one whole per cent. Our intelligence and diplomatic efforts around the whole world would be significantly harmed. And in the process our credibility of this great country of ours would be damaged. We have obligations to our allies around the world, and we wouldn’t be able to meet those obligations that we’ve made in many instances.
“What if a family has worked and worked in fragile economy and they are finally able to qualify for a home loan. 80 per cent of them, of course, are government-supported loans. They would stop, wouldn’t be able to get one, and it’s not on that person wanting to buy a home. How about that person that’s been trying to sell a home? Small business won’t be able to get the loans that they need, taxpayers won’t be able to get the tax refunds that they have earned…..
“As Mark Warner pointed out to us today, this shutdown would have a tremendous impact on the state of Virginia. This is Virginia’s big weekend. It’s the Cherry Blossom Festival. People plan to come here all year, and one of the things they want to do when they come here is take a walk down the mall, go to the National Art Gallery, go to one of the great Smithsonian museums. Won’t do that, they’ll close at 12:00 tonight. All this to stop women from getting the regular tests and preventative services that they need.
“90 per cent of Title X money is for preventative health services. It is against the law that any money be spent for abortion, and they’re not. It’s against the law. This is all a loss leader they have. And if Speaker Boehner can’t sell that to his Republicans in the next few hours, it will be crystal clear to the American people that democrats were reasonable and republicans are responsible for shutting down the government. The issue here is funding local health clinics that provide services like cancer screenings that save women’s lives and save money down the road by catching diseases that are expensive, expensive to treat, and sometimes too far along to treat. The fact that Republicans have made this about women’s health and not about money or anything controversial is really a shame. It’s un-American.
Analysis: Reid thinks the Democrats are winning. He’s pressing what he either thinks or has been told is the advantage. Hard.
Update #14: Sebastian Mallaby, in a recent interview with CNN, made a good point about the perils of a US government shutdown in the bond markets. At some point, he said, this kind of reckless behaviour is going to cost the United States dearly.
Here’s Mallaby’s full answer:
The second channel to think about is the debt market because ultimately American power depends on the American financial capacity to project power. And because of the status of the dollar as a reserve currency and the almost unlimited willingness of investors all over the world to finance American government debt, it has been possible for the U.S., particularly in a crisis when there is a flight to quality in capital markets, to count easy and plentiful funding to support its foreign policies.
So you have the irony that the Chinese and the Russians might vote against, let’s say the Iraq War in the UN Security Council, but then turn around and finance the Iraq War by buying American government debt.
So it really is a matter of enormous importance whether this reflexive unquestioning willingness of foreigners to buy American government debt might be undermined at some point, because at that point American power projection becomes a lot more complicated.
To the extent that people draw a lesson from the government shutdown that the American political system cannot even resolve a fight over 30 billion dollars, how on earth are they going to resolve a fight over a multi-trillion dollar long-term budget deficit?
Analysis: Good point.
Update #13: Priceless statement-of-the-day award goes to the SEC:
“The SEC won’t be able to regulate fair markets if there is a government shutdown.”
Analysis: They’re kidding, right?
Update #12: Senate Minority Leader Mitch McConnell (R-KY) had this to say about the budget negotiations: “Both sides are working hard to reach the kind of resolution Americans desire. A resolution is actually within reach. The contours of a final agreement are coming into focus.”
Analysis: Don’t let this get personal. We need to get it done, today.
Update #11: Another presser. Senator Reid will talk to the press at 2pm. The Boehner presser (just concluded) was basically a restatement of previous talking points.
Analysis: Aren’t they spending an awful lot of time talking to the press?
Update #10: A cynical person might look at this and say: it’s been perfectly arranged (almost art-directed) for our president to ride in at the last moment and save the day. I’ve been thinking along some of those same lines most of the day.
But I don’t really believe it.
For one thing, I don’t think Sen. Reid has much interest in playing second banana to the White House. I don’t think Sen. Reid has much use for the Obama White House at all.
Second, I think Reid wants to stick it to the Tea Party folks (and the GOP generally) as much as he possibly can, as payback for the campaign they ran against him in 2010. Harry Reid, before he got into politics, was a boxer. Boxers, when they’re hit, hit back. Harry Reid is hitting back.
Finally, the one thing I think both Speaker Boehner and Majority Leader Reid agree on is that President Obama hasn’t risked a thing in these negotiations and that he’s essentially playing it for his re-election campaign. Whatever else they are, both Boehner and Reid are political work-horses. They disdain a political show-horse.
Update #9: The National Journal, which is live-blogging the negotiations better than I am, reports that Speaker Boehner talked to the Republican Conference and said (paraphrasing here) “no deal yet, might not be one, but keep the faith.” He denied, as have many Republican legislators, that the hang-up had anything to do with Planned Parenthood, dismissing it as Democratic spin-doctoring. He said the hang-up was spending cuts.
Analysis: Deal seems to be slipping away.
Update #8: In 2009, I spent a fair amount of time talking to fund-raisers about a political campaign that I called “Recall Them All.” The short version of “Recall Them All” went like this:
1. Write a platform for deficit reduction based on shared sacrifice and tax simplification (and a couple of other obvious things which I won’t bore you with now).
2. Recruit highly qualified/smart people from across the country to run as “candidates” on the platform.
3. Qualify them for the ballot in every Congressional District and in every US Senate race on the ballot in 2010.
4. Raise hundreds of millions of dollars to promote the platform and then ask people to “Recall Them All;” meaning vote to throw out every incumbent Congressman/woman and the 33 or 34 US Senators up for re-election in the six-year cycle.
It didn’t go anywhere because we were unable to raise the first $5 million. I bet you could raise $10 million for “Recall Them All” today.
Update #7: Sen. John Kyl (R-AZ) delivered the GOP response to Sen. Harry Reid’s speech (see Reid’s speech below). Basically he said that Congress should pass yet another extension, in this case a 1-week CR (continuing resolution).
Meanwhile, Planned Parenthood, sensing a fund-raising opportunity, is playing the victim on the liberal cable TV channels.
Analysis: Kyl’s speech would indicate that the deal is not going to get done today. Planned Parenthood will enjoy a sharp uptick in fund-raising.
Update #6: Michele Bachmann told CNN today (and MSNBC on Wednesday) that she wouldn’t vote for the budget deal (because it did not de-fund Obamacare), but that it would get done.
Analysis: Maintain purity, appear pragmatic.
Update #5: White House statement (via press spokesman) says not much: “This morning, the President spoke separately to Speaker Boehner and Senate Majority Leader Reid. Discussions between the leaders and the White House aimed at reaching a budget agreement are continuing.”
Analysis: Float like a butterfly, sting like a bee.
Update #4: GOP House freshmen (and women) have been the driving force behind the push to cut Federal discretionary spending. Politico reports that they don’t intend to cave.
Analysis: They’d like a new House Speaker.
Update #3: Spin strategies. House Speaker Boehner says the dispute is over spending. GOP wants more spending cuts. Big spending Democrats want less. Senate Majority Leader Harry Reid says the spending cuts have been agreed to and that the only thing that stands in the way of a “done deal” is a GOP-rider seeking to de-fund Planned Parenthood.
Analysis: Advantage Reid.
Update #2: Majority Leader Harry Reid’s speech on the Senate floor:
“I’ve been married for a long time. More than 50 years. We have one daughter nine grandchildren. I love these women very, very much. One day, though, I may not be able to help them. And one of them may need cancer screening. It’s not a pleasant thought. But that’s the reality of life – that I may not be around to help them. When they need something. Over their lives they’ll be in need of other things like a cholesterol check, maybe their blood pressure screening, tests that are less serious, but just important to a woman’s health. They should be able to get the tests that could save their lives. So should every single woman in America. I believe that, and frankly, that’s not so controversial. It’s not so controversial to believe.
“Some women, of course, have doctors. Others, including many of the poorest among us, don’t. So where do they go to get blood pressure, cholesterol, cancer screening? Where do they go? Thankfully there’s a little known part of a little known law that saves many lives. It’s called Title X. And it’s part of a public health law. And it means that women and girls can go to their local health department or to community clinic and get these tests. President, more than five million women use these cents for Title X coverage every year. Five million. Five million. One of them could be my granddaughter or my daughter.
“President, some watching us today – and we know the whole world is watching us today – may be asking why I’m talking about women’s health when the question before us is the budget of the biggest economy on planet earth. Some may ask why we’re talking about the smallest corner of planet earth. But the government shutdown looming not weeks away or days away but hours away, why are we talking about whether women can keep getting something as simple and noncontroversial as a cancer screening? The answer is that Republicans want to shut down our nation’s government because they want to make it harder for women to get the health services they need. And by the way, Title X does not include abortion. It’s illegal to use federal funds for abortion services. So anyone who says this debate is over abortion isn’t being truthful. It’s about simple and important health services. Republicans want to shut down the government because they think there’s nothing more important than keeping women from getting cancer screenings? This is indefensible, and everyone should be outraged men, and women should be outraged.
“The Republican House Leadership have only a few hours left to lo in the mirror, snap out of it, realise how positively shameful it would be, President, for months this conversation has been about billions and trillions of dollars. It’s been about weighty issues and difficult decisions. This debate is about saving money. That’s what we thought it was about. But no longer. We have an agreement with the cuts in savings. I was there in the White House last night. And that agreement includes a historic level of cuts. We’ve always recognised we had to make cuts. That’s why we agreed and the White House last night, to make significant cuts. Hard, but important.
“But now the Tea Party, among others, but they’re the biggest push, is trying to move its extreme social agenda, issues that have nothing to do with funding the government. They’re willing, it appears, clearly, to throw women under the bus, even if it means they’ll shut down the government. Because that’s where we are. That is the one issue that was remaining last night. That agenda is an extreme agenda. I don’t agree with their ideas on social policy. But in our democracy, those ideas, however radical or however you may disagree with them, debate a debate if they want one. That’s fair.
“But that debate doesn’t belong in an urgent bill to keep the government running. And it especially doesn’t belong here at this late hour. The consequences of letting our country’s funding expire would be devastating. Almost a million…people who work for the bureau of land management, not a big presence in the presiding officer sites, but a huge presence, the state of Nevada is 87 per cent owned by the federal government. Forest service employees, FBI employees, Internal Revenue Service employees, people who work in this great government complex. Almost a million of them are waiting on pins and needles. Federal employees are like everybody else. They’re working from paycheck to paycheck. They’re wondering if they’re going to be able to get that new car they’ve needed for three or four years. They’re wondering if with summer coming, are they going to be able to take that vacation that they’ve wanted to for a long time? That’s what federal employees are like, everybody else.
“The consequences of letting our country’s funding expire would be devastating. People, individuals, devastating to our troops, to our small businesses, and to Americans’ everyday lives. People who just want to get a home loan, to get their tax refund, or, I repeat, their paycheck. We damage our image and credibility around the world. Republicans are asking me to sacrifice my wife’s health, my daughter’s health, and my nine granddaughters’ health. They’re asking me to sacrifice the health of women in Nevada and all across this country. President, I’m not going to be part of that. I won’t do it. As a legislator I’m very frustrated. As an American I’m appalled. As a husband, grandfather, father I’m personally offended.”
Analysis: Drive that wedge between the GOP leadership and the Tea Party. Effective positioning. The press will lap it up.
Update #1: Speaker Boehner’s statement of 30 minutes ago:
“I think the American people deserve to know when will the White House and when will Senate Democrats get serious about cutting spending. A bill that failed to include real spending cuts will hurt job growth and signal that Washington is not serious about dealing with its spending addiction. I think the Senate should follow the house lead and pass the troop funding bill and do it today. I also believe the president should sign the troop funding bill into law. This is the responsible thing to do to support our troops and to keep our federal government open. Thank you.”
Analysis: Doesn’t have the votes.
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