State of Play: Setting Up a Government Shutdown

National Journal Staff

The government will shut down at midnight unless Democrats and Republicans reach a budget deal to keep it open, but with just hours to go, the two sides remain very far apart.

The Senate is scheduled to come back today at 2:00 p.m. to take up a budget extension the House passed Sunday morning. Senate Majority Leader Harry Reid has indicated the Senate will reject that bill, as it would delay Obamacare for one year and repeal the medical-device tax. Senate Democrats and President Obama have said they won't accept cuts to Obamacare as part of the budget deal.

The House is unlikely to relent. House Majority Whip Kevin McCarthy, R-Calif., suggested on Sunday that if/when the Senate kills the House's Sunday CR, House Republicans will attempt to pass a new continuing resolution that still contains "fundamental changes" to Obamacare. Changes to the law could include an individual-mandate delay, a medical-device tax repeal, or a measure (known as the Vitter amendment) that ends health care subsidies for members of Congress, their staffs, and members of the executive branch. And while Republicans consider their options, they face pressure from powerful conservative groups such as Heritage Action to reject any deal that does not cut deep into the health care law.

In short: Democrats are saying they won't pass any bill that cuts into Obamacare and Republicans are saying they won't pass any bill that doesn't. Unless someone yields—or unless both sides agree to a short-term extension that gives them a few days breathing room to work on a bigger deal—a shutdown is coming.

This post will be updated constantly throughout the day. Your in-the-moment updates are below.

UPDATE 1:55 p.m.--10 Hours to a Shutdown: Carney Rejects Medical Tax Repeal

White House Press Secretary Jay Carney Monday said President Obama would reject a continuing resolution that repeals the medical device tax, a revenue raising portion of the Affordable Care Act.

"None-of-this is acceptable," Carney said during his daily press conference. "This is just blatant extortion."

Unlike other GOP proposals, such as a repeal or delay of all or part of Obamacare, repealing the medical device tax has some support among Democrats. But Democrats thus far have shown very little willingness to include any changes to Obamacare as part of the budget extension.

Carney said responsibility for avoiding a shutdown rests with House Speaker John Boehner, saying he should pass the Senate's "clean" continuing resolution. Doing otherwise, Carney said anything else would mean the speaker was giving into a "small, very extreme" faction of his House caucus.

"The Democrats are asking for nothing, no concessions, no ideological riders, no special pet projects, no political gotcha items" to extend government funding and raise the debt ceiling, Carney said. "Republicans on the other hand are attaching all sorts of agenda items... some of which are wholly unrelated to the budget." (By Patrick Reis)

UPDATE 1:54 p.m.--10 Hours to a Shutdown: Mitch McConnell to the Rescue?

Possibly reprising his role as last-minute savior, Minority Leader Mitch McConnell is suggesting to lawmakers a one-week continuing resolution without policy riders relating to Obamacare as a way to avoid a shutdown, a Senate GOP leadership aide confirms to National Journal.

"The Conference is looking at options."

"Despite the Democrats' refusal to work with the House to solve the problem, Republicans are working to protect the troops, prevent a shutdown and find solutions to the difficulties caused by Senate Democrats' delays," McConnell spokesman Michael Brumas said in a statement.

But Senate Majority Leader Harry Reid shot done the idea outright. Exiting the meeting of Democrats and asked if he was dead set against a one-week CR Reid said, "Yes."

Senate Democrats instead have said they favor a 6-week CR that strips out the House language delaying Obamacare and repealing the medical device tax.

Sen. Debbie Stabenow, D-Mich., said before the news of McConnell's offer that the Senate would vote this afternoon to send a clean CR back to the House.

This is not McConnell's first stab at hauling Congress back from the brink. During the fiscal cliff negotiations, it was McConnell and Vice President Joe Biden who authored a compromise to avoid fiscal crisis. (By Michael Catalini)

UPDATE 1:35 p.m.--10.5 Hours Until Shutdown: Sign of House GOP Fracturing?

Rep. Charlie Dent, R-Pa., a co-chair of the centrist "Tuesday Group" caucus in the House, tells NJ on Monday that he will argue in the closed-door House conference expected later in the day that it is time to accept a C.R. that will keep government funded without language to delay Obamacare, and avoid a shutdown.

Even if hard-liners in the conference don't think so, Dent said he believes Speaker John Boehner wants to, and that he should put such a CR on the floor. Dent says he believes Democrats and enough Republicans will pass it.

He noted Boehner has already shown several times this session he is willing to buck the supposed unofficial practice of not putting legislation onto the floor not supported by the "majority of the majority." He correctly ticks off such things as a hurricane relief bill, and the Violence Against Women Act -- not to mention the New Year's vote on the fiscal cliff bill.

Dent, echoing his positioning reported Friday in National Journal Daily, said he believes the GOP will be blamed for the shutdown, and that Republicans' fiscal and debt ceiling strategies can still be waged. He said no one wants to repeal the medical device tax more than he does. But he said attaching that, or any other strings to a CR at this time, is just not going to get passed the Senate. (By Billy House)

UPDATE: 1:10 p.m.11 Hours Until Shutdown: Don't Expect a Clean House CR

With House Republicans set to hold a special conference meeting at 2 p.m., speculation is swirling about the possibility of House leadership presenting the option of sending back to the Senate a "clean" short-term CR that keeps the government running and buys Republicans more time to plot against Obamacare.

But according to multiple senior GOP aides, there will be no discussion today of a clean CR. With the Senate poised to strip out the anti-Obamacare language from the House CR this afternoon and speedily send it back to the lower chamber, House leadership is still working with leading conservatives to decide how to respond, sources tell National Journal.

There are several provisions Republicans are considering attaching to their third CR, which would be promptly returned to the Senate. These options, which will be discussed at this afternoon's conference meeting, include: a one-year delay of Obamacare's individual mandate (not the entire law); a ban on health care subsidies for members of Congress and their staffs (either in the language written by Sen. David Vitter, or some House conservatives); and a repeal of the medical device tax, as written by Rep. Erik Paulsen of Minnesota.

It's unclear, an hour before the meeting, which of these options is considered the strongest Republican rebuttal to the Senate's clean CR. But the one-year delay of Obamacare's individual mandate has generated, by far, the most buzz on Capitol Hill today. (House Republicans, eager to continue their "compromise" narrative, could point to the 22 House Democrats who voted for this delay back in July.)

Stay tuned for the latest developments from the 2 p.m. conference meeting. (By Tim Alberta)

UPDATE: 12:50 p.m.11 Hours Until Shutdown: The Fundraising Goes On

Midnight on Monday brings two deadlines; one is for funding the government, and the other is the Federal Election Commission quarterly fundraising deadline.

A barrage of fundraising pitches came from Democrats as it became clear that Congress was barreling toward a shutdown. An email from Vice President Biden asked for $3 contributions to the Democratic Party. Another from President Obama directed donations to the Democratic Congressional Campaign Committee's 2014 efforts.

Republicans and conservatives have also been trying to capitalize off of the current congressional showdown. The Republican National Committee sent out its own fundraising email pitch from RNC Chairman Reince Priebus entitled "I Stand With Ted," off of the talk-a-thon of Sen. Ted Cruz, R-Texas.

The Senate Conservatives Fund has been playing ads featuring Sen. Ted Cruz, R-Texas, urging people to sign a petition to defund Obamacare, and a website dedicated to the effort solicits donations.

And despite the possible shutdown, at least seven members of Congress have scheduled fundraisers this week, according to the Sunlight Foundation. (By Elahe Izadi)

UPDATE: 12:12 p.m. 12 Hours Until Shutdown: The House Democrats' Plans

After the Senate votes, House Democrats will caucus behind closed doors around 2:30 p.m. At 3:00, House Minority Leader Nancy Pelosi and other House Democratic leaders are expected to hold a press conference. (By Billy House)

UPDATE: 12:00 p.m.  12 Hours Until Shutdown: The Senate Democrats' Strategy

At a press conference just before noon, Sen. Barbara Boxer, D-Calif., outlined what the Senate Democrats will do this afternoon. "We're going to handle this message from the House the same way we handled the first bill," she said. This means that Senate Democrats, after a caucus meeting, will strip the Obamacare delay and medical device tax repeal from the CR and send a clean resolution back to the House.

The frustration isn't just about the full delay. Boxer said that a medical device tax "has nothing to do with this particular situation that we're in now." Even if some Democrats are open for debating on repealing that taxwhich would cost $29 billion in revenue over a decadethe party at this point is standing firm on refusing to negotiate on any aspect of Obamacare as part of a budget negotiation. 

So what happens from there, if the House just sends another CR to the Senate with Obamacare amendments? "I'm not at liberty to say what Senator Reid will do if, what, when, and how," Boxer said.

We'll see how that holds after the caucus meeting, which is expected to happen at 1:!5 p.m. The Senate is expected to vote just after 2. (By Matt Berman)

UPDATE: 11:00 a.m.  13 Hours Until Shutdown: An Angry Breakfast With Chris Van Hollen

The remaining shred of good will between Republican and Democratic combatants in the House all but evaporated Monday as a key Democratic legislator accused Speaker John Boehner of abdicating his authority to freshman Sen. Ted Cruz (R-Tex.), ringleader-in-chief of the government shutdown war.

"Sen. Cruz is essentially running the show in the House," Rep. Chris Van Hollen told a reporters' breakfast. "If Speaker Boehner doesn't want to exert leadership he should go ahead and turn the gavel over to Speaker (sic) Cruz."

The ranking Democrat on the House Budget Committee, Van Hollen repeated that "Sen. Cruz is dictating policy in the House of Representatives today." With his leadership squarely on the line, Boehner has two choices, he added: "Either he should step aside for Sen. Cruz or he should exert some leadership."

House Democrats and White House officials, who believe Boehner is the weakest speaker in decades for not standing up to rebellious tea-party zealots in his GOP caucus, privately say Boehner would like to find a middle ground to keep the government from shutting down at midnight because he understands Republicans will be blamed by most Americans. But they claim Boehner cannot risk alienating the extremist wing of his caucus lest he be tossed out as House speaker. (By Tom DeFrank)