Senate talks on shutdown, debt stalled

Greg Nash

Senate Democrats are seeking to put more pressure on Republicans after a weekend of sporadic negotiations left leaders stalemated in talks to reopen the government and raise the debt limit.

Democrats have decided to ratchet up pressure on Senate Republican Leader Mitch McConnellMitch McConnellIran and heavy water: Five things to know Overnight Finance: House rejects financial adviser rule; Obama rebukes Sanders on big banks Senators roll out changes to criminal justice bill MORE (Ky.) instead of accepting a deal that locks in automatic spending cuts known as sequestration and makes reforms to ObamaCare.

Democratic leaders have instead urged Republicans to support a clean bill to raise the debt limit and warned the stock market could plunge on Monday or Tuesday.

Senate Majority Leader Harry ReidHarry ReidReid 'fairly certain' Democrats will win Senate Satanists balk at Cruz comparison Cory Booker is Clinton secret weapon MORE (D-Nev.) and McConnell did little direct negotiating on Sunday. The two leaders spoke by phone for about five or six minutes, according to a source familiar with the call.

Reid characterized the conversation as substantive and said he was optimistic about the chances for a deal.

“I have had a productive conversation with [the] Republican leader this afternoon. Our discussions were substantive and we’ll continue those discussions,” he said on the Senate floor.

“I’m optimistic about the prospects for a positive conclusion to the issues before this country today,” he added.

But Senate aides said they did not expect any deal to be announced Sunday evening.

“I’m not expecting anything the rest of the day,” said a GOP aide.

Senate Democrats took to the floor Sunday afternoon to warn of the economic consequences if Republicans do not agree to reopen the government and raise the debt limit immediately.

Senate Democratic Whip Dick DurbinDick DurbinElizabeth Warren stumps, raises funds for Duckworth Senators roll out changes to criminal justice bill Let the Democratic veepstakes begin MORE (Ill.) said, “for the United States to default on its national debt for the first time in history would be catastrophic.” 

“Bankers across this country, Macy’s, business leaders, all have said 'don’t be playing with this fire,' ” said Sen. Jon TesterJon TesterElizabeth Warren stumps, raises funds for Duckworth Senators subpoena EPA officials over mine waste spill The Hill's 12:30 Report MORE (D-Mont.).

Democrats argue they should not grant any concessions for Congress to fulfill what they view as its basic responsibilities.

Republicans expressed frustration and accused Reid of slowing down the negotiations. They say there is a substantial history of the president negotiating to periodically increase the nation’s borrowing authority.

“It’s time for Democrat leaders to take ‘yes’ for an answer,” McConnell said in a statement calling on the Democratic leadership to return to the negotiating table.

McConnell pressed Reid to accept a six-point plan sponsored by Sen. Susan CollinsSusan CollinsLarry Wilmore, Sting party in DC ahead of WHCD GOP women push Trump on VP pick Sanders is most popular senator, according to constituent poll MORE (R-Maine) to fund the government for six months at an annualized rate of $986 billion, raise the debt limit, make modest reforms to ObamaCare, grant federal agencies more flexibility to manage their budgets and establish a bicameral budget conference.

Republicans say a group of six mostly centrist Democrats helped craft the proposal.

These lawmakers disputed McConnell’s claim that Democrats had dropped out of negotiations.

“We have been involved in productive, bipartisan discussions with Sen. Collins and other Republican senators, but we do not support the proposal in its current form,” they wrote in a joint statement. “There are negotiations but there is no agreement.”

Sens. Heidi HeitkampHeidi Heitkamp oil is changing the world and Washington GOP blocks Obama sanctions czar Overnight Finance: Obama huddles with Yellen; Puerto Rico bill markup Wednesday MORE (D-N.D.), Mark PryorMark PryorEx-Sen. Kay Hagan joins lobby firm Top Democrats are no advocates for DC statehood Ex-Sen. Landrieu joins law and lobby firm MORE (D-Ark.), Joe DonnellyJoe DonnellyDemocrats block energy spending bill over Iran amendment GOP blocks Obama sanctions czar Indiana GOP divided over Senate primary MORE (D-Ind.), Joe ManchinJoe ManchinPennsylvania Senate rivals use Trump, Clinton as ammunition Democrats block energy spending bill over Iran amendment Coal Country’s top lawyer takes on Obama’s EPA MORE (D-W.Va.), Amy KlobucharAmy KlobucharSenate passes resolution honoring Prince CBS News lands Sanders as WHCA dinner guest Minnesota senators praise Prince on Senate floor MORE (D-Minn.) and Angus KingAngus KingCapitol Hill’s forest champions helped secure win for wood The Hill's 12:30 Report Merkley becomes first senator to back Sanders in White House bid MORE (Maine), an independent who caucuses with Democrats, signed it.

Sen. Bob CorkerBob CorkerIran and heavy water: Five things to know Trump seeks approval from foreign policy experts, but hits snags The Trail 2016: The establishment comes around MORE (R-Tenn.) told reporters in the Capitol Sunday afternoon that Democratic leaders bogged down talks by calling on Republicans to unwind the automatic spending cuts known as sequestration.

“They did [stall] over the last 24 hours but hopefully they’re going to get back on today,” he said.

Corker said negotiations faltered after the White House pushed Reid and Senate Democrats to attempt to lift the budget levels in any deal to reopen the government.

“It appeared the White House may have gotten a little involved with Senate leaders, Democratic leadership, to pull back away from the Budget Control Act,” he said.

Leaving the Capitol, Reid declined to say whether reforms to ObamaCare, such as delaying the medical device tax or setting up a verification process to prevent fraud in the insurance exchanges, was within the parameters of a potential deal.

“I’m not going to get into that,” he said.

When asked if he was more hopeful of a deal than at the beginning of the day, Reid replied, “sure.”

Durbin told reporters Saturday that the proposal to delay the medical device tax received a lukewarm reception in the Senate Democratic conference.

He said the American Hospital Association has already contacted the Senate leadership to see if other tax provisions in the Affordable Care Act are eligible for reform.

Republicans say Reid imperiled a possible deal when he pushed to raise funding levels above the caps set by the 2011 Budget Control Act.

"Now they want a spending bill that increases spending and dramatically will increase the debt," Sen. Rand PaulRand PaulFive ways Trump will attack Clinton Carter pledges probe of sex assault testimony Rand Paul wants to legalize cooperation MORE (R-Ky.), a McConnell ally, said on CNN's "State of the Union."

"It's a non-starter," he said.

Senate Budget Committee Chairwoman Patty MurrayPatty MurrayOvernight Healthcare: Medicare fight looms on Capitol Hill Senate GOP hardening stance against emergency funding for Zika Overnight Healthcare: More trouble for Zika funding MORE (D-Wash.) told Collins on the Senate floor Saturday that her plan was unacceptable because it would lock in sequestration.

Sen. Charles SchumerCharles SchumerCruz's dad: Trump 'would be worse than Hillary Clinton' With Ryan’s blessing, lawmakers press ahead with tax reform talks Big business will never appease the Left MORE (D-N.Y.) acknowledged Sunday that spending levels were a sticking point in the talks.

“The dispute has been how to undo the sequester,” Sen. Chuck SchumerCharles SchumerCruz's dad: Trump 'would be worse than Hillary Clinton' With Ryan’s blessing, lawmakers press ahead with tax reform talks Big business will never appease the Left MORE (D-N.Y.) said on "Face the Nation" on CBS on Sunday, explaining that Democrats want a mix of entitlement reforms and revenue increases.

Reid, however, denied that he had pressed Republicans to increase spending above the limits set by the 2011 budget law.

“Any talk about breaking the caps is not anything that came from us,” he said.

A Senate Democratic leadership aide said, “The suggestion that Democrats insist on breaking the budget caps is false and belied by the facts.

“Democrats all voted for the Senate-passed short-term CR at current sequester levels,” the aide added.

--Brendan Sasso contributed to this report, which was updated at 8:05 p.m.