Tag: Congressional Game of Chicken

With the Republicans now in charge of the Senate, the filibuster games continue with the shoe on the other foot. Although I have to say, the Democrats have used it to stop the more egregious legislation that the Republicans have tried to pass. By attaching controversial riders to popular bills, such as their fight with the White House over immigration getting attached to the funding bill for the Department of Homeland Security, the GOP leadership didn’t expect the tactic to backfire in the press and public opinion. The Republicans may have gerrymandered themselves into being in charge but that doesn’t mean they have the capacity to lead or public support.

The Senate GOP current hostages are the victims of human trafficking and Attorney General nominee Loretta Lynch. A popular bipartisan bill to aid victims of human trafficking has been held up by the Democrats in the Senate when they discovered that the Republicans had surreptitiously added an anti-choice amendment that would restrict funding for abortions.

The Justice for Victims of Trafficking Act of 2015, which would establish a fund to raise money for victims from the fees charged to traffickers, wasn’t supposed to be controversial. It has supporters on both sides of the aisle and easily passed the House earlier this year. Both Senate Majority Leader Mitch McConnell (R-KY) and Minority Leader Harry Reid (D-NV) have urged members of their parties to support the legislation.

But this week, top Democrats learned that the bill includes language modeled after the Hyde Amendment, which restricts public funding for abortion procedures. The new fund created for trafficking victims would be subject to the same restrictions that currently prevent the public Medicaid program from using federal dollars to finance abortion coverage. [..]

Adam Jentleson, a spokesman for Reid’s office, said the proposed language in the trafficking bill would actually go beyond Hyde’s current scope by including fees and fines, instead of just taxpayer funds. He believes that “could lead to a dramatic expansion of abortion restrictions in future years.” [..]

Reproductive rights groups have also harshly criticized the abortion provision in the bill, accusing Republicans of playing politics with the vulnerable victims of human trafficking. They point out that victims often need access to abortion services because they have been subject to sexual violence, so a fund designed to help them shouldn’t cut off resources related to abortion.

Needless to say, the Democrat’s filibuster of a second bill, with unpopular provisions, in as many months is not sitting well with Senate Majority Leader Mitch “The Human Hybrid Turtle” McConnell who went on CNN’s “State of the Union” and told host Dana Bash that the consideration of Loretta Lynch would not happen until the trafficking bill passed.

McConnell told Dana Bash on CNN’s “State of the Union” that Lynch’s nomination will remain in a holding pattern until Democrats allow the trafficking bill to move forward.

“This will have an impact on the timing of considering the new attorney general. Now, I had hoped to turn to her next week, but if we can’t finish the trafficking bill, she will be put off again,” he said.

He argued it was a non-controversial bill that came out of the Judiciary Committee unanimously. He noted the language Democrats are objecting to was part of the legislation from the beginning of its consideration.

“They all voted for the very same language in a bill in December,” he said. “This is boilerplate language that has been in the law for almost 40 years that they all voted for three months ago in another bill.”

Sen. McConnell’s claim that the Democrats knew about the anti-abortion provision and knowingly voted for it is [disputed by the Democrats on the Judiciary Committee :

“These provisions, my caucus did not know about,” Senate Minority Leader Harry Reid (D-Nev.) told reporters Tuesday. “The bill will not come off this floor as long as that [abortion] language is in it.”

Even Democrats on the Judiciary Committee said they had no idea the abortion provision was in the bill. Some suggested they had been misled.

“There was a representation that the controversial provision was not included in this bill. It turns out that it was,” said Sen. Dick Durbin (D-Ill.), a Judiciary Committee member. “I don’t know how that happened or who was the author of it.”

“A list was sent to certain members saying, ‘Here are the changes from last year.’ This provision was not listed among them,” said Sen. Chuck Schumer (D-N.Y.), also a Judiciary Committee member.

Sen. Patrick Leahy (D-Vt.), the committee’s ranking member, chastised his GOP colleagues for using “debates about some of the most vulnerable among us to advance their own political agenda.”

Needles to say the Democrats, so far, aren’t caving to this latest GOP blackmail:

Sen. Charles Schumer (N.Y.), the third-ranking member of the Democratic leadership, slammed McConnell for further delaying Lynch.

“For months and months, Republicans have failed to move forward with‎ her nomination using any excuse they can, except for any credible objection to her nomination itself. It’s time for Republicans to stop dragging their feet on Loretta Lynch,” he said in a statement Sunday morning. ‎

Adam Jentleson, Senate Democratic Leader Harry Reid’s (D-Nev.) spokesman, accused McConnell of backtracking on his pledge to schedule Lynch for a vote.

The GOP hates Attorney General Eric Holder, who has already said his goodbyes, but they have held up Ms. Lynch’s nomination for 128 days, longer than any other Attorney General nominee. This might not be so bad since Ms. Lynch may not be the best choice to replace Mr. Holder considering her dubious ties to Wall Street and the banks. Her slap on the wrist agreement without criminal charges in the HSBC money laundering case would be a good reason to reject her. Now, the question is will the Democrats sacrifice her to protect the right to an abortion for victims of human trafficking. Stay tuned to see who blinks first.

Filibuster has suffered a mortal wound. In an historic vote, the Senate drastically change the game by eliminating the need for 60 votes to confirm a presidential nominee to executive and judiciary, ending at least some of the obstruction by Republicans that has hampered President Barack Obama’s administration. The final straw that changed the mind of Senate Majority Leader Harry Reid (D-VT) was the filibuster of the last three court appointment to the U.S. Court of Appeals for the District of Columbia Circuit, regarded as second only to the Supreme Court in influence, it plays a central role in upholding or knocking down federal regulations. The court was evenly divided between Democratic and Republican appointed judges with three vacancies that the Republicans were determined to keep vacant, along with the other 90 court vacancies, so long as Barack Obama was in the Oval Office. Thinking that Reid would never go “nuclear” and lacked the votes, the Republicans overplayed their hand angering the Democratic holdouts against limiting the filibuster. The changes will apply to all 1,183 executive branch nominations that require Senate confirmation, not just cabinet positions but hundreds of high- and mid-level federal agency jobs and government board seats. Needless to say, the Republicans are angry, as this also puts into play the possibility of ending filibuster altogether.

With filibuster gone, there is still an obstacle for judicial appointments known as the “blue slip rule.” As Kevin Drum explains at Mother Jones:

One of the Senate’s oldest traditions is that judicial nominees require approval from their home-state senators before they can move forward, and that approval comes in the form of a blue slip returned to the chairman of the Judiciary Committee. [..]

   Pre-1994: Generally speaking, only one blue-slip is needed for a nominee to move forward.

   1995-2000: Republicans take control of Senate and decide that two blue slips should be required. This makes it easier to kill Clinton nominees.

   2001: George Bush is elected president. Republicans no longer want to make it easy to block nominees, so they return to the rule that only one blue-slip is required to move forward.

   2001-02: Jim Jeffords defects, putting Democrats back in control of the Senate. They return to the rule requiring two blue-slips to proceed.

   2003: Republicans win back control of the Senate. They up the ante by effectively moving to a zero blue-slip rule: they’ll allow hearings on nominees even if no senators return blue-slips. Democrats threaten to filibuster over this rather obvious abuse of power and insist on a return to the two blue-slip rule.

   2007-Present: Democrats win control of the Senate and Pat Leahy of Vermont becomes chairman of the Judiciary Committe. Leahy is a traditionalist who maintains the two blue-slip rule.

By maintaining this rule, Sen. Leahy hurts Obama’s nominees in red states  where aggressive Republican refuse to approve even moderate judges.

As Chairman of this Committee, I have steadfastly protected the rights of the minority. I have done so despite criticism from Democrats. I have only proceeded with judicial nominations supported by both home state Senators. That has meant that we are not able to proceed on current nominees from Arizona, Georgia, Nevada, and Louisiana. I even stopped proceedings on a circuit court nominee from Kansas when the Kansas Republican Senators reversed themselves and withdrew their support for the nominee. I had to deny the Majority Leader’s request to push a Nevada nominee through Committee because she did not have the support of Nevada’s Republican Senator. I will put my record of consistent fairness up against that of any Judiciary chairman.

Perhaps this was why, even as a traditionalist, Sen. Leahy voted to change the filibuster rule.

On MSNBC’s All In, host Chris Hayes discusses the new rules and the history of filibuster with Senators Tom Udall (D-NM) and Tim Kaine (D-VA); former spokesman for Sen. Reid Jim Manley; and former Senate Parliamentarian Alan Frumin.

After months of Republican obstruction, the Senate Democrats voted to end the need for 60 votes to bring the name of a executive or judicial nominee to the floor for approval. The vote to end filibuster passes 52 to 48 with three Democrats voting against the change, Senator Carl Levin (MI), Joe Manchin (WV) and Mark Pryor (AR).

With the rare presence of all 100 senators seated and Sen. Pat Leahy (D-VT) presiding as the president pro tempore, the change began when Majority Leader Harry Reid (D-NV) called up the nomination of Patricia Millett to the D.C. Circuit Court of Appeals for another vote. Senate Minority Leader Mitch McConnell (R-Ky.) then called for a five hour recess for time to find a resolution to void the rules change. That motion failed 46 – 54.

Reid opened debate in the morning by saying that it has become “so, so very obvious” that the Senate is broken and in need of rules reform. He rolled through a series of statistics intended to demonstrate that the level of obstruction under President Barack Obama outpaced any historical precedent.

Half the nominees filibustered in the history of the United States were blocked by Republicans during the Obama administration; of 23 district court nominees filibustered in U.S. history, 20 were Obama’s nominees, and even judges that have broad bipartisan support have had to wait nearly 100 days longer, on average, than President George W. Bush’s nominees.

“It’s time to change before this institution becomes obsolete,” he said, citing scripture — “One must not break his word” — in accusing Minority Leader McConnell (R-Ky.) of breaking his promise to work in a more bipartisan fashion.

McConnell responded to Reid by changing the subject to the Affordable Care Act and accusing Democrats of trying to distract Americans from the law’s troubled rollout. Getting around to fidelity, McConnell noted that Reid had said in July that “we’re not touching judges,” yet he was now choosing to do so. Reid casually brushed off his suit coat and sat down.

The Senate has finally put a partial end to a stupid rule that was originally intended to extend debate not block it. Now that the Democrats have shown some spine, the next move is to end the 60 vote threshold altogether.

Yes, I know. It deja vu all over again, as Yogi would say. Lucy will snatch the football away again and whatever cliche that fits. Only this time the Republicans have boxed themselves in with their arguments over their blocking of President Barack Obama’s last three judicial appointments to the vacancies on the DC Circuit Court of Appeals. This is Greg Sargent’s assessment after the last filibuster of nominee Robert Wilkins, who is currently a U.S. District Court judge in Washington.

Senator Harry Reid appears set to go nuclear – before Thanksgiving. [..]

Reid has concluded Senate Republicans have no plausible way of retreating from the position they’ve adopted in this latest Senate rules standoff, the aide says. Republicans have argued that in pushing nominations, Obama is “packing” the court, and have insisted that Obama is trying to tilt the court’s ideological balance in a Democratic direction – which is to say that the Republican objection isn’t to the nominees Obama has chosen, but to the fact that he’s trying to nominate anyone at all.

Reid believes that, having defined their position this way, Republicans have no plausible route out of the standoff other than total capitulation on the core principle they have articulated, which would be a “pretty dramatic reversal,” the aide continues.

“They’ve boxed themselves in – their position allows them no leeway,” the aide says, in characterizing Reid’s thinking. “This is not a trumped up argument about the qualification of a nominee. They are saying, `we don’t want any nominees.'”

The aide says Reid believes he now has 51 Dem Senators behind a rules change, if it comes down to it. The Huffington Post reports that some Dem Senators who have previously opposed changing the rules – such as Barbara Boxer and Dianne Feinstein – are now open to it. “I believe that we are there,” the aide tells me.

With Boxer, Feinstein and Pat Leahy (D-VT) aboard, even if Senators Max Baucus (D-MT) and Claire McCaskill (D-MO) are noncommittal and Sen. Carl Levin (D-MI) firmly opposed, Reid ]may well have the 51 votes to reform. Reid met Wednesday with the advocates of reform and an invitation went out from Reid for a meeting on Thursday to discuss the rules change.

In an interview with The Huffington Post on Wednesday, Sen. Jeff Merkley (D-Ore.), one of the loudest champions of narrowing the filibuster, insisted that this wouldn’t be yet another instance of the football being placed invitingly in front of Charlie Brown’s foot. After a showdown this January resulted in a toothless set of procedural changes and another standoff this summer resulted in a fleeting pact between the parties, Democrats are beyond frustrated, the Oregon Democrat said. [..]

Aides on the Hill are equally adamant that this isn’t some big bluff on Reid’s part. One top aide told The Huffington Post that even if Republicans simply allowed for up-and-down votes on the president’s three nominees to the U.S. Court of Appeals for the District of Columbia Circuit (the nexus of this current filibuster fight) it wouldn’t dramatically alter the party’s thinking.

Chris Hayes, host of MSNBC’s All In, discussed why Harry Reid should use the nuclear option with Senator Jeff Merkley Dahlia Lithwick and Alan Frumin.

Reid is expected to move on reform before Thanksgiving. It could come as early as Friday. I am not holding my breath.

The side show over filibuster and Republican obstruction of President Barack Obama’s appointments to cabinet positions and to vacant seats on the bench, especially to the DC Circuit which hears some of the most important constitutional cases, has once again begun amidst the main event of the failure the roll out of the ACA. Senate Republicans filibustered a judicial nomination to the DC Circuit Court

President Obama’s latest choice to fill one of the vacancies on a powerful appeals court went down in a filibuster on Tuesday as Senate Republicans blocked another White House nominee – the third in two weeks – and deepened a growing conflict with Democrats over presidential appointments.

By a vote of 56 to 41, the nomination of Cornelia T. L. Pillard, a Georgetown law professor, fell short of clearing the necessary 60-vote threshold. [..]

The disagreements carried over onto the Senate floor on Tuesday, as Democrats accused Republicans of blocking a perfectly qualified woman for political purposes, while Republicans said Democrats were desperately looking for a wedge issue.

Looming underneath their disagreements about Ms. Pillard is the likelihood – which appeared to grow considerably on Tuesday – that the fight will escalate and result in a change to the Senate rules to limit the minority party’s ability to filibuster judicial nominees.

Senator Richard J. Durbin, the chamber’s No. 2 Democrat, warned Republicans that they were pushing the Senate dangerously close to a tipping point.

The Republicans attempt to reframe the argument saying that the DC Circuit isn’t as busy as other courts such as the 2nd Circuit in New York. The court handles most of the legal challenges to federal agencies, putting it at the center of fights over regulations – including the healthcare reform law and Obama’s push to regulate greenhouse gas emissions from power plants. After Tuesday’s vote, Senator Charles Grassley (R-IA) said, “We’re going by the standards that Democrats set in 2006.”

Their strategy: lock in the current 4-4 court by eliminating the empty seats and redistributing them to other circuits, because some other courts (ones that aren’t the first recourse for people suing Congress over legislation) have more cases. “In 2012, there were 512 ‘administrative appeals’ filed in D.C.,” said Grassley on Tuesday. “In the 2nd Circuit, there were 1,493. Stated differently, in D.C. there were only 64 administrative appeals per active judge. The 2nd Circuit has nearly twice as many with 115.”

That framing, which seemed like a stretch-no one also denies that the D.C. Circuit gets more pivotal cases than the 2nd Circuit-has since been universally adopted by the right. Ohio Sen. Rob Portman, the sort of Republican whom Democrats like to cut deals with, has endorsed Grassley’s Court Efficiency Act because it would “bring a reasonable end to the destructive partisan fights to which both parties have contributed.” A third-party ad hitting Arkansas Sen. Mark Pryor (a Gang of 14 member) right now accuses him of trying to “pack a key court with liberal judges” because he doesn’t want to eliminate the three open seats. Grassley points out that Democrats blocked a 2006 Bush nominee on the grounds that the seat didn’t need to be filled-what more evidence does he need?

“We’re going by the standards that Democrats set in 2006,” said Grassley after Tuesday’s vote. “They said that we didn’t need any more judges. And that’s exactly what I’m telling ’em, what they said! We’re just doing what they said. They set the standard and they can’t say we’re doing this because we’ve got a Democratic president, because I got a judge removed, the 12th one removed, when we had a Republican president.””

The problem with Grassley’s argument is that in 2006, the Republican’s got what they wanted. By threatening the “nuclear option,” the Democrats backed down and three very conservative, ideologues were appointed to the DC circuit. Funny how the Republicans can now support that which they opposed seven years ago.

Support for filibuster reform picked up a new supporter after the vote, Senate Judiciary Committee Chair Patrick Leahy (D-VT).

“If the Republican caucus continues to abuse the filibuster rule and obstruct the president’s fine nominees to the D.C. Circuit, then I believe … a rules change should be in order,” Leahy said on the Senate floor, just before Republicans blocked Nina Pillard’s confirmation to the D.C. Circuit Court of Appeals.

“That is not a change that I’ve wanted to see happen,” he continued. “But if Republican senators are going to hold nominees hostage without consideration of a nominee’s individual merits, drastic measures may be warranted.”

Leahy, laughing at the Republican excuse that each judge costs $1 million per year, stated the Republican government shut down cost billions of dollars that would have funded those appointments for years.

Contributing editor at the National Journal and resident scholar at the conservative American Enterprise Institute, Norm Ornstein laid out his reasons why it was time to stop the filibuster madness

Mel Watt was nominated by President Obama to head the Federal Housing Finance Agency-and was blocked by a Republican filibuster. The rationale that Watt was not qualified for the position was flimsy at best. If individual senators wanted to vote against him, they certainly have the right to do so on any basis. But to deny the president his choice for this post, a veteran and moderate lawmaker with sterling credentials and moral character, via filibuster, is nothing short of outrageous. Only two Republicans in the Senate, Rob Portman and Richard Burr, Watt’s colleague from North Carolina, voted for cloture.

Watt was not the only victim of a drive-by filibuster; so was Patricia Millett, a superbly qualified and mainstream nominee for the D.C. Circuit Court of Appeals. Only two Republicans supported cloture here; Lisa Murkowski and Susan Collins, and three others voted “present” (which was no help, since anything but a vote for cloture is meaningless with a rule requiring 60 votes, period, to end debate). The rationale here was even more flimsy than that used against Watt, namely that Obama is trying to “pack” the D.C. Circuit. FDR tried to “pack” the Supreme Court by adding seats to the existing Court. Barack Obama is moving to fill long-standing vacancies on the D.C. Circuit. On this Circuit, thanks to a slew of retired judges appointed by presidents long gone, conservatives have an edge that Mitch McConnell is determined to keep no matter what.

When Harry Reid and McConnell reached a deal on filibusters in January, it was clear that a key component of that deal was that Republicans in the Senate would give due deference to a newly reelected president in his executive nominations, and would only oppose judicial nominations for courts of appeals under “extraordinary circumstances,” which clearly means judges without clear qualifications or experience, or extreme ideologies. No one could accuse Millett of either of those characteristics. This is all about denying a president the right to pick judges to fill existing vacancies. Two more nominees for the D.C. Circuit are coming up soon, the real test of whether Republicans will continue to flout the January agreement and threaten fundamental comity in the Senate. [..]

If the other two D.C. Circuit nominees are filibustered and blocked, I would support Harry Reid’s move to change the rules now, to move from a 60-vote requirement to stop debate and vote to a 40-vote requirement to continue debate. The argument that if he does so, Republicans will do the same thing when they take the White House and Senate is a bad one: Can anyone doubt that McConnell would blow up the filibuster rule in a nanosecond if he had the ability to fill all courts with radical conservatives like Janice Rogers Brown for decades to come? I hope it does not come to this-and that the problem solvers in the Senate keep their titles, preserve their institution, and stop the filibuster madness.

But does Senate Majority Leader Harry Reid have the votes? Even with Leahy’s support this time, there may not be the 51 votes needed.

“If we can’t move ahead based on how the procedures have been perverted, we need to fix the procedures. That’s the deal,” said Larry Cohen, president of Communications Workers of America, which is leading a coalition lobbying for changes to filibuster rules.

Cohen said Reid “is willing” to change the rules but “the question is whether the leader can get 50 Democrats, not 49 or 48, to sustain that motion.”

A senior Democratic aide said Reid has not conducted a recent whip count and questioned how outside groups or rank-and-file Democratic senators would know the vote count if the leader attempted a rule change immediately.

“Any declarative statements at this point are extremely premature,” said the senior aide.

A cloture vote on the nomination on Robert Wilkins, a third nominee to the court, will be held in the near future. The Republicans have already indicated that his  nomination will also be filibustered. We’ll see if reform of this antiquated, misused rule gains more support after that.  

President Barack Obama signed the bill early Thursday morning that reopens the government and raises the debt ceiling, officially ending the 16-day shutdown, the White House said.

CNN Breaking News

If anyone thinks that the latest budget crisis is over, or that there was a victory, they are living in the bubble of a fool’s paradise.

This has cost the economy billions, hurt countless individuals in many ways for a deal that merely kicks the can down the road. Come January, unless a long term budget deal is passed, another continuing resolution (CR) will be needed. February is even more ominous when again the US hits its borrowing limit.

Obama should have stood his ground last year when he caved and gave the Republicans the sequester which is far more damaging to the economy than the ACA. Look what happened to the Republican brand. That could have been last year and the Democrats might have stood a better chance of increasing its majority in the Senate and gaining even more than 8 seats in the House.

There is no sense in rehashing what can’t be undone. The Democrats now need to deal with repairing the damage of the last 5 years continuing to hold firm on the budget, ending the sequester cuts for more reasonable spending that will benefit the majority of Americans and finally killing the biggest threat to the US and World economies, the debt ceiling cap.

Time to take the bullets out of the gun.

Chris Hayes, the host of MSNBC’s All In, has the most concise and informative summary of the countdown to default.

With days until default, a breakthrough?

With just three days to go until an unprecedented, possible U.S. default, there is some hope at this hour of a deal to re-open the government, raise the debt ceiling, and put an end to the shutdown. Rep. Chris Van Hollen and Rep. Scott Rigell join Chris Hayes to discuss inner dealings and where we’re at the road to re-open the government.

There are a few fools in the House and Senate who don’t understand the consequences of the US defaulting on its debt payments. Flirting with default is not an option to solve a budget impasse. It’s a recipe for global financial disaster.

The right’s antics could cause a Depression: The terrifying default aftermath

by David Dayen, Salon

Normally with a financial crisis, there’s at least agreement on the need for a response. Not with these lunatics

The biggest threat from the twin calamities of the government shutdown and the debt limit breach is not actually the real-world effect; it’s what happens the next day, and the day after that. In other words, the most frightening thing about default, which is much more problematic than the shutdown, is what happens afterward. [..]

And all of these outcomes pale in comparison to what would happen if the government defaulted on any of its debts. Put the misguided statements of debt limit denialist Republicans aside. Based on current cash on hand at the Treasury Department, roughly 32 percent of the funds owed (pdf) between Oct. 18 and Nov. 15 would have to go unpaid. That’s a massive reduction in federal spending, and would cause a significant hit to Gross Domestic Product. Prioritization of payments, which may be unconstitutional, would certainly be a logistical nightmare, forcing Treasury to rewire its payment system (pdf) and pick and choose between up to 100 million monthly invoices.

If one of the missed payments is to a holder of U.S. debt, then you have a default event that could cause credit markets to freeze, the U.S. dollar to plummet, and financial institutions to struggle to secure short-term lending on which they rely. With the dollar and the U.S. Treasury bond serving as a benchmark for world markets, Businessweek says that the resulting global apocalypse would dwarf the implosion of Lehman Brothers that precipitated the 2008 financial crisis. And it would injure the perceived stability of U.S. debt maybe forever, raising our borrowing rates as investors decide a country that threatens to default for no good reason isn’t worth putting their money into. [..]

Armed with the knowledge that Congress won’t meaningfully help recover the economy, the White House needs to think very hard about forsaking the various options they could use to try and avert a debt default. It’s not just that the alternative is a disaster; it’s a prolonged disaster.

IMF piles pressure on US to reconcile differences and prevent debt default

by Larry Elliot and Jill Treanor, The Guardian

Shares and oil prices rise in hope of six-week extension as OECD warns US deadlock threatens world economy

The International Monetary Fund and the Organisation for Economic Cooperation and Development both issued sharply worded warnings to Republicans and Democrats amid signs that America’s Asian creditors were becoming alarmed at the potential consequences of the impasse. [..]

Speculation about a deal emerged after Jack Lew, the US Treasury secretary said there would be chaos if the US defaulted – a message rammed home by the IMF’s Christine Lagarde and the OECD’s secretary general Angel Gurría.

Lagarde, the IMF’s managing director, said there would be very dangerous consequences for the US economy and very dangerous consequences outside the US economy if the default was not prevented.

She distanced herself from the infighting in Washington, noting: “The IMF does not make recommendations about how, politically, this can be resolved. We don’t take a political view. We just look at the economic consequences.

“When it affects the largest economy in the world, we are bound not only to look at the immediate domestic consequences but at what happens elsewhere, so that we can have a dialogue with our members to help them prepare. I hope we will be able to look back in a few weeks and say what a waste of time that was. But we have to look at the risks no matter how unlikely they are to materialise.”

On Wednesday, Massachusetts Senator Elizabeth Warren addressed the Senate warning that “this is no time to act out dangerous fantasies.”

“We’re in this position for one reason, and one reason only: because Congress told the government to spend more money than we have – and Congress told the Treasury to run up our debt to pay for it – but now Congress is threatening to run out on the bill,” Senator Warren said.  “…The idea that we can somehow renege on our debts without paying a huge price is a fantasy-and a very dangerous one.” [..]

“This fight is about financial responsibility. Financially responsible people don’t charge thousands on their credit cards and then tear up the bill when it arrives. Financially responsible nations don’t either….If we default on our debt, we could bring on a worldwide recession-a recession that would pummel hard-working middle class people, people who lost homes and jobs and retirement savings and who are barely getting back on their feet,” said Warren.

Talks between White House and Republicans fail to end US shutdown

by Dan Roberts, The Guardian

Hopes that a deal might be in sight disappear as Barack Obama and House speaker John Boehner fail to see eye to eye

Discussions between Barack Obama and House speaker John Boehner broke up after 90 minutes with little apparent progress, although there was a marked change in tone on both sides that suggests a deal could still be close. [..]

But the Republicans refused to lift a separate threat to spending authorisation, which has led to a partial shutdown of the government since 1 October.

Obama had insisted on at least a temporary reprieve from both threats before he would agree to negotiate over Republican demands to repeal his healthcare reforms and cut spending.

On Thursday night, it appeared the president had chosen to stand his ground and may have initially refused to accept the partial climbdown from Boehner.

The game continues and no one is hitting the brake.

The business community is worried that they no longer have any influence over the Republican Party and place the blame for this current crisis squarely on the Tea Party faction of the House.

As the government shutdown grinds toward a potential debt default, some of the country’s most influential business executives have come to a conclusion all but unthinkable a few years ago: Their voices are carrying little weight with the House majority that their millions of dollars in campaign contributions helped build and sustain.

Their frustration has grown so intense in recent days that several trade association officials warned in interviews on Wednesday that they were considering helping wage primary campaigns against Republican lawmakers who had worked to engineer the political standoff in Washington.

Such an effort would thrust Washington’s traditionally cautious and pragmatic business lobby into open warfare with the Tea Party faction, which has grown in influence since the 2010 election and won a series of skirmishes with the Republican establishment in the last two years. [..]

In the two previous battles over the debt limit, many chief executives were reluctant to take sides, banding together in groups like Fix the Debt, which spent millions of dollars on a campaign urging Democrats and Republicans to work toward a “grand bargain” on the budget. But with shutdown a reality, and the clock ticking toward default, some of those same executives now place the blame squarely on conservative Republicans in the House.

The handful of Tea Party extremists, who believe that it’s OK to crash the world’s economy for their ideology, are out of control and unreasonable, not that they ever weren’t. But now the creators of this American version of Al Qaeda are scared. Yeah, they are scared. When you have the Koch brothers writing letters (pdf) to the US Senate insisting that the company was not involved in any ploy to shut down the government in efforts to defund Obamacare and Heritage Action, an arm of the Koch bothers’ Heritage Foundation, telling the House to raise the debt ceiling, you know they’re rattled.

Michael Needham, CEO of the powerful group Heritage Action, said that he opposed conditioning a crucial vote to increase the government’s borrowing authority on the group’s main goal: defunding Obamacare.

Under questioning at a breakfast with reporters, hosted by the Christian Science Monitor, Needham, a product of the Stanford Business School, conceded that failure to raise the debt ceiling would indeed disrupt the global economy. [..]

That could give Obama and House Speaker John Boehner (R-Ohio) at least a smidgen of room to maneuver if and when they decide to strike an overall deal: the White House could get a “clean” debt ceiling vote (though of short duration) and the GOP could get a concession or two on the continuing resolution to fund the government’s annual spending.

Taking the cue, the reluctant leader of the pack, House Speaker John Boehner (R-OH, House Majority Leader Eric Cantor (R-VA))and other members of the GOP leadership are meeting this afternoon at the White House to discuss a short term solution to raise the debt ceiling but not ending the government shutdown

Republican House leaders Thursday offered the president and Senate far less than they want in the ongoing financial standoff, presenting a six-week hike of the debt limit, but no deal to reopen the shuttered federal government.While the plan would grant six more weeks before the nation faces the chance of a default, it is contingent on the president agreeing to give up one of his key stances — that he will not sit down and negotiate until the government is reopened and the House stops using the $16.7 trillion debt limit as a lever to extract concessions. The limit is expected to be reached Oct. 17.

Nope, says the White House:

“The President has made clear that he will not pay a ransom for Congress doing its job and paying our bills,” an administration official said in a statement.

“It is better for economic certainty for Congress to take the threat of default off the table for as long as possible, which is why we support the Senate Democrats’ efforts to raise the debt limit for a year with no extraneous political strings attached,” the official continued, adding that Obama still want a straight up-or-down vote on a measure that the Senate passed to reopen government.

“Once Republicans in Congress act to remove the threat of default and end this harmful government shutdown, the President will be willing to negotiate on a broader budget agreement to create jobs, grow the economy, and put our fiscal house in order,” the official said. “While we are willing to look at any proposal Congress puts forward to end these manufactured crises, we will not allow a faction of the Republicans in the House to hold the economy hostage to its extraneous and extreme political demands. Congress needs to pass a clean debt limit increase and a funding bill to reopen the government.”

This doesn’t sound very promising. Boehner’s problem is that unless he violates the Hastert Rule and goes the House Minority Leader Nancy Pelosi (D-CA) and the Democrats for help, there is no way he can get a clean debt ceiling bill to the House floor. Boehner is betting the faith and credit of the US on Obama agreeing to his terms. The president is betting that Boehner will be forced to cave, abandon the Hastert Rule, and put a clean debt ceiling bill up for a vote.

Reid and Obama are also unsure whether Boehner can actually push his proposal through the House in the first place. They aren’t convinced hard-line conservatives and tea party aligned House Republicans won’t balk, forcing Boehner to turn to House Democrats for support. But any Democratic support would be tied to reopening the government.

Here’s the House GOP plan, and the thinking behind it: Republicans would vote to lift the debt ceiling until Nov. 22 – just before the Thanksgiving recess – while prohibiting the Treasury Department from using extraordinary measures to lift the borrowing limit. The legislation will also set up a negotiation over the borrowing cap and government funding. At this time, there are no spending cuts attached to the legislation. There is also no vote scheduled.

The game of chicken continues leaving not just the average American at great risk but putting the business community at loggerheads on who to fund to represent them in the long run. This game will have consequences. Question is for whom? And how dire?