WASHINGTON — Time growing desperately short, Senate leaders took command of efforts to avert a Treasury default and end the partial government shutdown Tuesday night after a last big attempt by House Republicans abruptly collapsed.
Aides to both Senate Majority Leader Harry Reid and the Republican leader, Mitch McConnell, expressed revived optimism about chances for a swift agreement — by today at the latest — that could pass both houses. Their efforts toward a bipartisan resolution had seemed likely to bear fruit a day earlier before House conservative were given a last-minute chance for their version.
As hours ticked down toward Thursday’s Treasury deadline, the likeliest compromise included renewed authority for the Treasury to borrow through early February and the government to reopen at least until mid-January.
While a day of secret meetings and frenzied maneuvering unfolded in all corners of the Capitol, Sen. Barbara Mikulski, D-Md., stood on the Senate floor at midafternoon and declared, “We are 33 hours away from becoming a deadbeat nation, not paying its bills to its own people and other creditors.”
In New York, the stock market dropped and the Fitch rating agency warned that it was reviewing the government’s AAA credit rating for a possible downgrade, though no action was near. The firm, one of the three leading U.S. credit-ratings agencies, said that “the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.”
According to Treasury Secretary Jacob Lew, unless Congress acts by Thursday, the government will lose its ability to borrow and will be required to meet its obligations relying only on cash on hand and incoming tax receipts. President Barack Obama and numerous other officials in government and finance have warned of severe economic consequences if federal obligations come due that can’t be paid.
By all accounts, though, an end seems near for the impasse that has once again exposed a government so divided that it sometimes borders on dysfunction. Though the House failed to muster sufficient support for a conservatives-only bill in the GOP-majority chamber on Tuesday, enough Republicans there seem likely to join House Democrats to approve a bipartisan version if it can be approved by the Senate and sent to them.
Politically, neither party is faring well, but polls indicate Republicans are bearing the brunt of public unhappiness as survey after survey shows their approval ratings plunging.