WASHINGTON – Time growing desperately short, House Republican efforts to pass legislation averting a Treasury default and ending a partial government shutdown collapsed Tuesday night, and one of the countrys top ratings firms warned of a possible downgrade in the nations creditworthiness.
The decision by Speaker John Boehner and the GOP leadership to pull a bill they had unveiled earlier in the day appeared to mark the end of what amounted to a daylong detour from separate negotiations in the Senate that had appeared on the verge of bearing fruit.
There was no immediate reaction from Senate Majority Leader Harry Reid or the Republican leader, Sen. Mitch McConnell, on next steps as a divided government sought to extricate itself from yet another crisis.
As the 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 Fitch rating agency warned that it was reviewing the governments AAA credit rating for a possible downgrade, though no action was near. Fitch, 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.
On Wall Street, the Dow Jones industrial average fell 133 points after rising a day earlier when optimism spread that a deal might be at hand.
Under the revised bill prepared by House Republicans, the Treasury would be permitted to borrow normally until Feb. 7 and the government reopened with sufficient funds to carry it to Dec. 15.
Additionally, members of Congress, the president, vice president and thousands of aides would no longer be eligible to receive employer health care contributions from the government that employs them.
Before the bill seemed to lose steam later in the day, Michael Steel, a spokesman for Speaker John Boehner, said in a statement, The House will vote tonight to reopen the government and avoid default.
He said the legislation would end Obamacare subsidies for elected officials and staff in Washington, D.C., and pressure Senate Democrats to accept more sensible time frames for reopening the government and renewing Treasurys borrowing authority.
Gone from the measure was a pair of provisions that had drawn objections. One was a plan to delay a medical device tax created under the Affordable Care Act, the health care law derided by critics as Obamacare. The other would have imposed tougher income verification standards on individuals and families seeking subsidies for care under the law.
Democrats had viewed both as concessions to Republicans, and they deemed the provisions inclusion as a violation of Obamas vow not to pay a ransom to the GOP for passing essential funding and borrowing measures.