This will be a fast-moving story for the next couple of days. As of early Tuesday morning, House Republicans were offering their own bill to reopen the government until Jan. 15 and lift the debt ceiling until Feb. 7. But their package includes several tweaks to the health care law - and the White House, along with Senate Democrats, have been unwilling to use the Affordable Care Act as a pawn in reopening the government and staving off default. The Senate has its own proposal to resolve the crisis, but during a meeting this morning House Republicans pretty much threw it in the trash. (At the beginning of the meeting, Republicans sang "Amazing Grace," reports Politico.) What we're seeing play out has nothing to do with policy. It's all about face-saving. The Republican spin is expected to emphasize how the House is trying to save the day with just a few modifications. Senate Democrats will no doubt see it differently. From National Review's Robert Costa:
"What they'll come up with in the Senate will not get the support of most House Republicans," predicts a House conservative strategist. "And thus, after a lot of hand-wringing, it'll be DOA. Just like with BCA in 2011, the most important question is, what can pass the House? Everything else is subordinate to that. So, while the Senate is taking the lead right now, I expect the focus will soon shift back to the House, and back to the idea of doing a 6-week extension of the debt ceiling. While Obama and Reid won't like it, they don't want to go past Oct. 17, either. The politics of the debt ceiling are different from the shutdown. And so, we feel they'll reluctantly accept it as a stopgap measure."
Stocks have been bouncing around in the red all morning, with the Dow down 50 points at last check. That's not so much a sign of panic as it is uncertainty.
Update at 9:40: The Republican proposal is a non-starter from all sides and now they're searching for other ways to give off the appearance of victory in the face of defeat. Freedonia couldn't have staged this any better. Market is stuck in neutral, as if in awe at the incompetence.