POLITICS
10/14/2013 08:56 pm ET | Updated Oct 15, 2013

Senate Budget Deal Takes Shape, Facing Tough Odds To Avert Default

WASHINGTON -- Whatever deal emerges from overnight negotiations in the Senate, Republican lawmakers said they weren't sure it could pass quickly enough in their chamber to avert a default -- or that it would ever see the light of day in the House.

The Treasury Department has warned that sometime on Thursday it may no longer have enough cash on hand to pay all the nation's obligations, setting up a potential default that economists have warned repeatedly may have catastrophic economic consequences.

As of Monday evening, the contours of a deal included reopening the government through Jan. 15 and extending the debt limit until Feb. 15. Both chambers also would have to appoint representatives for a budget conference that would end on or around Dec. 15, with the goal of agreeing to framework for deficit-reduction. Changes to President Barack Obama's health care law would be minimal: Democrats would get a delay of a reinsurance tax to benefit unions, while Republicans would get income verification for Obamacare exchanges.

Senate Majority Leader Harry Reid (D-Nev.) said there had been "tremendous progress" earlier in the day. His Republican counterpart, Minority Leader Mitch McConnell (Ky.), agreed.

But in order for the measure to pass in the Senate quickly, it would require unanimous consent. That would include the approval of Sens. Ted Cruz (R-Texas) and Mike Lee (R-Utah), leaders in picking a fight over Obamacare who have objected repeatedly to holding a conference on the budget that might have resolved the debt fight.

Cruz, cornered by a crowd of reporters outside of a closed elevator door Monday, declined to say what he thought of the deal.

"We'll have to wait to see what the details are," Cruz said at least nine times.

His colleagues said they hoped Cruz and his allies would not object if the measure hits the Senate floor.

"I think it'd be very tough for somebody to stand up just on procedural grounds just to hold it up at this stage in the game. I would hope that's not the case, but that's always a concern," said Sen. Jeff Flake (R-Ariz.), who supports the deal.

Sen. Chuck Grassley (R-Iowa) didn't say if he'd vote for something along the lines of what's taking shape in the Senate talks. He thought it would pass the Senate, ultimately, but not necessarily quickly.

"It looks to me like it would be difficult to get" unanimous consent, Grassley told reporters. "But if this is a thing that's put together enough, except for going through the process of cloture, you're going to get this through the Senate, would be my guess."

But the Senate likely is not the biggest problem in ending the standoff. The House has repeatedly retreated from attempts to pass measures that would keep the wheels of government grinding, opting for confrontations. Republicans there balked, for instance, at a short-term "continuing resolution" that would have kept government open until mid-November and removed at least that crisis while legislators slugged it out over debt.

"They obviously couldn't pass a clean C.R. until Nov. 15, so I think John's going to have a difficult time irrespective of what the measure is," said Sen. Saxby Chambliss (R-Ga.) of his friend, House Speaker John Boehner (R-Ohio).

Sen. Bob Corker (R-Tenn.), who has been in the thick of bipartisan talks in the Senate, said he thought that whatever the Senate does, it likely will be the House that takes the decisive steps, for both procedural reasons and because its members need time to wrap their minds around a staggering defeat.

Procedurally, the House could send a bill to the Senate as a "message," which is harder to block and can be voted on quickly in the upper chamber.

"One of the things that's a benefit about a House origination is it's a message," Corker said. "You can respond to a message immediately."

Corker told reporters that letting the House hash over the Senate ideas could help its members come to grips with the reality that they embarked on an effort championed by Cruz -- taking vital government responsibilities hostage to defund Obamacare -- that even many Republicans warned was doomed to failure.

"There's an expectation that has to change and that sometimes takes attempting to do things that won't work," Corker said. "It's a tough vote, but the fact is all of us have to realize the reality of the situation, and that is that two months have been blown on the wrong subject."

One of the loudest GOP critics of the confrontational strategy has been Arizona Republican Sen. John McCain, who warned many times that with Democrats running the Senate and a Democrat in the White House, there was no way to end Obamacare.

McCain emerged from an elevator outside the Senate floor Monday evening clutching an emailed printout of poll results that showed Americans were turning on his party -- exactly as he predicted.

"We're livin' the dream," McCain said with characteristic sarcasm.

But he did make a serious point that echoed Corker, noting that Democrats should not push their luck and give the GOP nothing.

"The Democrats, I think, by doing negotiations now, are doing the right thing," McCain said. "Because you really don't want to crow over a victory. They know they're going to win. They know that. But we need to try to get an agreement that gives some something for the Republicans."

McCain declined to offer his colleagues in the House advice, saying the pressure they face would not come from him.

"If they want to move, they can move tonight. If they don't want to move, they won't," McCain said. "They'll have to wait until the markets crater. And I've talked to several billionaires that used to be Republican supporters that said they believe the markets will react in a very negative fashion unless we act."

Boehner spokesman Michael Steel didn't rule out the possibility of a measure originating in the House. "It depends on what the deal is, and how we want to respond," Steel said.

Ryan Grim contributed reporting.

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