SHOWDOWN ON THE HILL: House Shutdown Plan Fails - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

SHOWDOWN ON THE HILL: House Shutdown Plan Fails; Focus Again On Senate

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UPDATE: 

WASHINGTON (AP) - It's apparently up to the U.S. Senate to fashion a compromise to reopen the government and avert a national default.

Hours after House leadership said there would be a late vote on an alternative to a possible Senate compromise, the measure was pulled.

It would have permitted the Treasury to borrow normally until Feb. 7 and the government to reopen with sufficient funds to carry it to Dec. 15. But there were objections from all corners of the rank and file. And Heritage Action, a group with tea party ties, said it would include the vote in its determinations next year on which candidates to support in the midterm elections.

Meanwhile, aides to both Senate Majority Leader Harry Reid and the Republican leader, Mitch McConnell, expressed revived optimism about chances for a swift agreement - by Wednesday at the latest - that could pass both houses.

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.

Previous Coverage: 

WASHINGTON (AP) - A spokesman for Speaker John Boehner says the House will vote Tuesday night on legislation that would reopen the government and avert a financial default.
 
Michael Steel says the bill would keep the government operating until Dec. 15 and let the Treasury borrow money until Feb. 7.
 
It also says members of Congress, the president, vice president and thousands of congressional aides would no longer eligible to employer health care contributions from the government that employs them.
 
There was no immediate reaction from the White House or Democrats, who had objected to an earlier version of the House GOP bill.

PREVIOUS STORY:

NBCNEWS.COM - Bipartisan Senate negotiations over the shutdown and debt limit have been upended by Republicans in the House, who are offering their own proposal in the face of stiff resistance from Democrats and the White House.

The House will take up an eleventh-hour proposal, likely late on Tuesday, to extend government funding through mid-December and raise the debt ceiling to early February. The new GOP offer would also strip lawmakers, their staff and members of the Obama administration of subsidies to buy insurance through the Affordable Care Act's exchanges.

That proposal is a revision from an earlier counter-offer assembled earlier by House Republicans, which was shelved when it became apparent to the leadership that conservatives in the lower chamber would balk at their proposal.

The theatrics grounded Senate negotiations to reopen the government – which had been progressing to the optimism of Democrats and Republicans alike – to a halt. Moreover, the new Republican gambit threw broader efforts by Congress to avert an historic default on the national debt into flux.

Congress must authorize new borrowing to meet the government's existing obligations by Thursday or risk default.

"I know I speak for many of us who were working in good faith when I say we felt blindsided by news from the House," Senate Majority Leader Harry Reid, D-Nev., said Tuesday.

Just 24 hours earlier, the Senate was the epicenter of bipartisan negotiations that had seemed to form the basis of an agreement to reopen the government through mid-January, and raise the debt limit through mid-February.

Those negotiations were spearheaded on the Republican side by Minority Leader Mitch McConnell, R-Ky., who on Monday said that he had made "substantial progress" toward an agreement during a day full of talks with Reid and fellow senators. But even those talks were incomplete as of Tuesday afternoon, when White House press secretary said that lawmakers were "far from a deal at this point."

Senators said by mid-afternoon on Tuesday that those talks had effectively been put on hold by news of the tentative counter by the House, the path forward for which was anything but clear.

Aides leaked the details of an earlier House GOP plan during an unusually-long meeting of Republican lawmakers on Tuesday morning. That plan called for many of the same provisions as had been outlined in Senate negotiations, with added sweeteners for conservatives. Those enticements included measures to strip lawmakers and members of the administration of subsidies to buy health insurance under the Affordable Care Act and a two-year delay of that law's medical device tax.

Just as soon as those details were floated, though, House Speaker John Boehner, R-Ohio, retreated from the legislation.

"There are a lot of opinions about what direction to go," he said late Tuesday morning. "There have been no decisions about what exactly we will do."

Democrats decried the effort, vowing not to support the new GOP proposal, and a White House spokeswoman called the plan "a partisan attempt to appease a small group of Tea Party Republicans who forced the government shutdown in the first place."

Republican leaders still struggled, though, to win over conservatives in the House who threatened to balk at their leaders' latest proposal. With the clock winding down until a potentially economically cataclysmic default, GOP leaders went back to the drawing board – even as Reid vowed to defeat their proposals in the Senate.

The theatrics amounted to one of the more dramatic moments of a fiscal impasse that has plagued Washington for much of the last month. The impasse is the culminating point of a series of showdowns between House Republicans, Senate Democrats and President Barack Obama over the past two and half years.

Stocks tumbled as confusion took hold of Washington as fears of a default come Thursday were on the rise.

For his part, Obama was out of sight for most of the day on Tuesday as he and Vice President Joe Biden prepared to meet with House Democratic leaders at the White House.

PREVIOUS STORY:

WASHINGTON (AP) - Yesterday's optimism over a possible bipartisan solution to Washington's latest budget impasse has been replaced by more partisan rancor. House Republicans today unveiled a proposal stocked with conservative priorities, and the White House instantly rejected it.

The immediate result has been to freeze Senate negotiations. House Speaker John Boehner hasn't said when he might bring the plan to a vote and it's unclear whether the GOP leadership has the votes to pass the measure.
 

PREVIOUS STORY:

WASHINGTON (AP) - The White House says the latest proposal from House Republican leaders for reopening the government and extending the nation's borrowing cap is a partisan effort to appease tea party conservatives. It praises bipartisan negotiations in the Senate as a good-faith effort to end the partial government shutdown and avoid an economy-shaking default.
    
The White House also announced it will meet with House Democratic leaders Tuesday afternoon as negotiations continue and a deadline to raise the debt ceiling moves ever closer.
    
White House spokeswoman Amy Brundage says a proposal from House GOP leaders that would attach health care law changes to shut-down and debt ceiling measures is a, quote, "partisan attempt to appease a small group of tea party Republicans who forced the government shut down in the first place."

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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