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Shutdown Watch-Day 14: Headed down to the wire (again)

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Good Morning! Today is a federal holiday, but that doesn’t mean much to hundreds of thousands of furloughed federal employees as the partial government shutdown enters its third week. According to a message from one agency leader, the Office of Personnel Management has said this is an unpaid furlough day both for non-excepted and excepted employees unless they are required to report to “perform excepted functions.”

And about ending that shutdown . . . Sunday produced lots of saber-rattling and zero tangible evidence that a deal is in sight, either on reopening the government or raising the $16.7 trillion debt ceiling, with just three days now remaining before the Obama administration says it will run out of emergency borrowing authority.

Nonetheless, Senate Majority Leader Harry Reid, D-Nev,. sounded an upbeat note, saying that he had  a “productive conversation” with Senate Minority Leader Mitch McConnell, R-Ky. “Our discussions were substantive, and we will continue those discussions,” Reid said on the Senate floor, according to the Congressional Record. “I am optimistic about the prospects for a positive conclusion to the issues before this country today.”

The stock market seems a bit dubious, with the Dow Jones Industrial Average and other major indices all initially down this morning.

But if this fight originated in Republicans’ insistence on defunding implementation of the Affordable Care Act, (aka Obamacare), the battlefield has now expanded to encompass Democrats’ demands to soften or eliminate this fiscal year’s looming sequester-related budget cuts. Absent any congressional action to rewrite the 2011 Budget Control Act, the next round of reductions is likely to hit in January. McConnell is open to including changes in a debt ceiling increase, as long as the end result doesn’t raise overall spending levels and doesn’t involve a tax increase, according to an aide.  But opening a new front in the conflict may make it that much harder to resolve, particularly with time growing short before a possible debt default.

Speaking on “Fox News Sunday” yesterday, Sen. Bob Corker, R-Tenn., warned that Democrats are “on the verge of being one tick too cute.” Just as the Republican-controlled House overreached in seeking to undo the health care law, Democrats are overreaching “as they see the House possibly in disarray,” Corker said.

The upshot (hold your breath): A final deal may involve a short-term continuing resolution to reopen the government and buy time for talks on a broader budget agreement. According to The Wall Street Journal , Reid sounded out McConnell on a CR that would run through mid-December at current spending levels, accompanied by an approximately six-month debt limit increase. In our deadline-driven political system, the expectation is that all sides will come together in time to stave off catastrophe (think August 2011). But assuming that the Senate can pass the usual stop-gap bill, the measure still has to get through the House, long-time budget watcher Stan Collender noted today in a Tweet. “No guarantee at all House GOP will follow even if [the Senate[ vote is 100-0,” Collender wrote.

In other news:

The Federal Housing Administration is calling on mortgage lenders to be sensitive to financial hardships facing federal employees and contractors subject to furloughs, layoffs or lost income stemming from the shutdown. That advisory comes as many, if not most, feds receive smaller than usual paychecks because of the shutdown.

The National Association of State Budget Officers (in case you thought the spending stalemate only affects feds) puts out a brief on what the shutdown means for state governments.

The American Federation of Government Employees warns that this week will be a “critical turning point” for many of its members as their paychecks run out.

Any major developments we’ve missed, particularly in regard to agency news? Let us know with an email to shutdownstories@federaltimes.com

 

 

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