US Senate leaders poised to reach agreement
Hopes deal will bring a halt to fiscal standoff before US borrowing authority runs out
House Republicans will meet today at 9am in the Capitol and may consider debt-limit legislation on the floor. Senators will meet in party caucuses. “We’ve not made any decision,” House majority leader Eric Cantor, a Virginia Republican, said yesterday.
“We are going to meet with our members in the morning to determine the best path forward.”
US stocks rose yesterday amid signs of a potential agreement. The Standard and Poor’s 500 Index advanced 0.4 per cent to 1,710.14 in New York, reversing an earlier drop of as much as 0.7 per cent. The benchmark gauge is at its highest level since September 19. The MSCI Asia Pacific Index today added 0.5 per cent by 11.06am in Tokyo as stocks from Japan to Australia jumped.
US cash bond markets were closed for yesterday’s Columbus Day holiday. Mr Reid and McConnell, veteran Senate deal makers, are brokering the agreement, reached during conversations that started over the weekend.
Democrats want as long a debt-limit increase as possible and as short a government funding extension at Republican-preferred levels. Republicans want the opposite. Possible sticking points late yesterday included whether Democrats would agree to Republican demands that the Treasury department be barred from using so-called extraordinary measures to extend the debt-limit deadline after February 7th.
Such maneuvers pushed forward the deadline for five months this year, though it’s not clear how much time they would buy in 2014. “It is very unwise,” Senate finance committee chairman Max Baucus, a Montana Democrat, said of the Republican demand.
The accord being worked out wouldn’t include repealing or delaying an excise tax on medical devices, said the person familiar with the talks and a Senate Democratic aide who requested anonymity.
Republicans had sought that change, joined by some Democrats who represent states such as Minnesota with concentrations of device makers. The plan would postpone a reinsurance fee the government is levying on health plans for the first three years of the health- care exchanges - amounting to $63 a worker next year, said the person familiar with the talks.
Trade unions, aligned politically with Democrats, have asked for the delay. Agency Flexibility Democrats could claim that the agreement is a trade of health-law measures favored by each party that just happens to be linked to a debt-ceiling increase and spending bill free of policy conditions.
Republicans could say they got health-law changes attached to the must-pass measures. The agreement also would give federal agencies flexibility to manage the across-the-board spending cuts known as sequestration if they occur in 2014.