Here Comes The Cave
House GOP prepares to retreat. AP: "House Republican leaders are considering a short-term increase in the U.S. debt limit as a possible way to break the gridlock ... These officials said there is far less urgency inside the leadership about ending the current nine-day partial government shutdown ... In the Senate, Democrats have proposed a no-strings-attached $1 trillion increase in borrowing authority that is designed to prevent a recurrence of the current confrontation before the 2014 elections. A test vote is scheduled for the weekend, and Republicans have yet to indicate how vigorously they might oppose it."
"Surrender" Boehner's only option, says W. Post's Sean Sullivan: "There are no easy answers for Boehner, and there is no endgame that doesn’t involve him absorbing more of the blame. But with the walls closing in and options running out, 'surrender' might start to look more like an escape hatch in the coming days."
McConnell floats end to shutdown and debt limit increase plan to Senate GOP. Politico: "...the Kentucky Republican is gauging support within the Senate GOP Conference to temporarily raise the debt ceiling and reopen the government in return for a handful of policy proposals. Among the ideas under serious consideration are a repeal of medical device tax in the health care law, a plan to verify that those seeking subsidies under Obamacare prove their income level and a proposal to grant additional flexibility to federal agencies to implement sequestration cuts."
But Senate GOP may filibuster long-term debt-limit increase. The Hill: "Sen. Roger Wicker (R-Miss.), emerging from a meeting with colleagues, said 'virtually all of us' would vote to sustain a filibuster."
Obama open to short-term debt limit increase. CNN: "Talking about a short-term solution, he told the group [of House Democrats] 'if that’s what (House Speaker John) Boehner needs to climb out of the tree that he’s stuck in, then that’s something we should look at.' The president also said if Republicans want to propose a short-term fix and Democrats say no, then the firm ground Democrats think they’re standing on now would soften."
As is Pelosi. The Hill: "Asked if House Democrats were willing to accept a short-term debt ceiling hike, Pelosi said that 'if the alternative is to renege, to default,' then they would support it. At the same time, Pelosi insisted that Democrats would not agree to any conditions attached to a short-term hike."
GOP congresspeople in swing districts feeling heat. AP: "Republican success in hanging onto these districts will depend, in part, on how well they explain the shutdown to weary voters — and how long it lasts ... [Rep. Mike] Fitzpatrick — like many of his GOP colleagues across the country — now says he would support a spending bill regardless of whether it funds the health care law. And like Republicans in swing-voting districts elsewhere, he's downplaying his initial votes that led to the shutdown, offering a distinctly moderate tone when asked about the continuing crisis."
"GOP quietly backing away from Obamacare" reports Politico: "With polls showing their party is suffering the brunt of the blame for the shutdown, many top Republicans are quietly moving past the Obamacare debate. Many Senate Republicans’ demands do not include changes to Obamacare, but rather cuts to Medicare, Social Security and changes to the Tax Code. House Republicans are also considering a short-term debt hike, but no one expects that it will be accompanied by changes to Obamacare."
Obama meets with House GOP caucus today reports AP.
Immigration reform could help GOP recover. Politico: "A trio of polls in key GOP-held House districts being released Thursday show that voters overwhelmingly back immigration reform with a pathway to citizenship, and suggest the Republican Party would improve its image in these predominantly Latino areas if Congress passes a rewrite of U.S. immigration laws."
Is Grand Bargain Next?
Liberals worry grand bargain may return. The Hiill: "The offers to cut Social Security and Medicare have infuriated his left flank, which is now raising alarms in hopes of steering the president away from extending similar proposals for the sake of an agreement — either now or on a larger budget package down the line."
Some conservatives too. National Review's James C. Capretta: "...in the current environment, the speaker could secure a budget agreement with the White House and Democrats that did not include significant concessions on taxes — concessions that would badly divide the GOP. Moreover, it is also a real stretch to assume that budget talks would ever produce the kind of entitlement reforms that might make swallowing another tax hike worthwhile."
Yellen To Set Her Own Course
Yellen to bring consistency to Fed. NYT: "...she has suggested that the Fed should be more systematic, predictable and transparent — in short, that it should lay down some rules and stick to them. It is a template that Wall Street likes, and one that underscores the Fed’s departure from the days of Alan Greenspan, its chairman from 1987 to 2006, whose Delphic pronouncements were endlessly parsed by economists and investors."
Yellen expected to follow through on Wall Street reform. Bloomberg: "As Federal Reserve vice chairman, Janet Yellen played a supportive role in the biggest overhaul of financial regulation since the 1930s. As chairman, she will lead the drive for those policies while monitoring their costs for borrowers and banks ... While estimating economic and social cost is a routine part of the central bank’s analysis in financial rule-making, Yellen’s policy approach probably will give it greater emphasis..."
.
