Short-term fix for fiscal crisis appears closer

Republican senators, from left, Ted Cruz of Texas, John McCain of Arizona, David Vitter of Louisiana, and Richard Shelby of Alabama, walk in the rain back to their bus at the the White House, Friday, Oct. 11, 2013, after they met with President Barack Obama.

WASHINGTON — The impasse over the nation’s finances appeared closer to a short-term resolution Friday as President Barack Obama and congressional Republicans showed greater flexibility. But officials headed into the weekend without a deal to end the shutdown and avert what could be a devastating default after the government reaches the current borrowing limit on Thursday.

While the outlines of an agreement that would involve a temporary fix followed by longer-term budget talks came into view, the president and lawmakers faced the challenge of framing such a deal in a way that all sides could accept politically.

“We’re obviously in a better place than we were a few days ago in terms of the constructive approach that we’ve seen of late,” Jay Carney, the White House press secretary, said late in the day after the president met with the entire Senate Republican conference and consulted by telephone with Rep. John A. Boehner of Ohio, the Republican speaker of the House. “But there’s not an agreement.”

Both houses of Congress were scheduled to meet over the weekend. But White House officials and senior lawmakers cautioned against expecting a quick deal, although much of the incendiary speech that has characterized the fiscal fight had given way to words like “constructive” and “progress.”

Republicans in the Senate emerged from a 90-minute meeting with Obama at the White House with a collective sense of tempered hope. A coalition of Republicans, many of them centrists from independent-leaning states who have been openly critical of the aggressive posture of their House colleagues, was trying to find room to maneuver in a very tight space.

Democrats, led by Sen. Harry Reid of Nevada, the majority leader, have repeatedly said they will not negotiate over reopening the government or raising the debt ceiling. But privately, a growing number of them said they had come to the realization that to insist on giving nothing to Republicans at all was a bargaining position they might be unable to maintain.

What they could give and how a compromise could be structured so it allows the president and Democratic leaders to say credibly that they have not reversed their hard-line position is unclear. White House officials said the president would be willing to sign a short-term increase in the debt ceiling and then negotiate on larger budget issues, but not if the two were explicitly linked.

Sen. Lisa Murkowski of Alaska, one of a handful of Republicans who often reaches across the aisle, said Obama had told them he would be willing to “trade” something in exchange for their cooperation.

“He said ‘space for trading,’” Murkowski said. “So apparently we are not talking about negotiation, we’re talking about some trading space.”

But among some Democrats, especially Reid, there was a growing concern that the White House would be willing to bargain away too much — a sense, as one senior Democratic aide put it, that history was repeating itself. Many liberals were angry after the White House cut budget and tax deals in the past that they felt gave in too much to conservative demands, most recently over the fiscal cliff talks late last year that resulted in higher taxes on the wealthy but not as high as some would have liked.

White House officials said their allies need not worry. Confident that he had the upper hand politically, Obama met or talked by phone with governors and business leaders to enlist them to lobby Congress to avoid a default. Aides said he was holding firm against any deal that included specific concessions sought by Republicans, particularly involving his signature health care program.

“It is our view that we cannot have a situation where the debt ceiling is extended as part of a budget negotiation for only six weeks, which would put us right back in the same position that we’re in now,” Carney said. But “he has seen indications from Republicans in both the Senate and the House in the last 24 hours that they too are interested in engaging in serious budget negotiations” if the government is first reopened and the borrowing limit raised.

Reid has put in motion a process for the Senate to begin voting Saturday on a Democratic plan to raise the debt limit through the end of 2014, a move intended to pressure Republicans.

The first step in the process is a motion to open debate on the debt-ceiling measure, but there is not currently enough Republican support to pass it. Members of both parties planned to talk throughout the weekend to come up with an alternative.

Sen. Jeff Flake, R-Ariz., said he was eager for the Senate to take the lead in negotiating with Obama on reopening the government. “House Republicans so far don’t want to get rid of the shutdown, and I don’t know in what world we’re faring well in the shutdown in terms of policy or politics, so in that sense, yeah, I’d rather have the Senate,” he said.

Sens. Susan Collins, R-Maine, and Joe Manchin III, D-W.Va., were drafting a plan to extend the borrowing limit through the end of January and include a stopgap spending measure that would reopen the government through the end of March. Government agencies would have flexibility on how to handle existing across-the-board spending cuts.

Their plan also would call for a delay or an easing of a tax on medical devices and an immediate bipartisan conference for the House and the Senate to begin negotiations over a budget, with the expectation of an agreement by mid-January.

Collins said the president had described the plan “as constructive, as having elements that could be worked on.”

She added, “but I don’t mean to give you the impression that he endorsed it and said, ‘What a great plan.’ He didn’t.”

A new poll from NBC News and The Wall Street Journal highlighted the peril for Republicans, showing that they have shouldered a far larger share of the blame for the government shutdown than Obama. Just 24 percent of Americans viewed the Republican Party favorably, an all-time low in the survey.

Republican lawmakers and aides repeatedly brought up the poll Friday. “The reality is we are, in the eyes of the American people, in very bad shape,” said Sen. John McCain, R-Ariz. “You can’t argue with those polls.”

To the dismay of conservatives, discussions about including revisions to Obama’s health care program have been dropped from most serious negotiations. An email plea from the group Tea Party Express summed up their frustration Friday. “Are you like us and wondering where the fight against Obamacare went?” it asked.

Senate Republicans have insisted on dropping efforts to dismantle the law. At a lunch meeting in the Capitol this week, McCain asked the roomful of Republican senators if any still thought reversing parts of the program was an achievable goal now, according to a person briefed on the meeting. No one raised a hand, not even Sen. Ted Cruz of Texas, the public face of the conservative push in Congress to repeal the law.