

Budget Battle


The standoff left little prospect that Congress could reach agreement on terms for funding the government by midnight Monday, when the current fiscal year expires. A shutdown would leave essential services operating but prompt federal agencies to suspend many functions and furlough hundreds of thousands of workers.

On a 231-192 vote, the House early Sunday passed a one-year delay of the health law, often called Obamacare, and attached it to a plan to fund the government through Dec. 15. The legislation now goes to the Senate. It also includes a provision repealing a tax on medical devices intended to help finance the health law, which the House approved on a 248-174 vote.

But Senate Majority Leader Harry Reid (D., Nev.), in a statement issued hours before the House took up the bill, pledged to strip out the health provisions. He denounced the GOP vote as "pointless" and declared the impasse to be back at "Square 1."

Speaker of the House John Boehner walks out of a meeting with House Republicans on Capitol Hill Saturday. European Pressphoto Agency

The White House said that if the House bill reached President Barack Obama, who championed the health law, he would veto it.

The stare-down between the two chambers intensified as Democratic aides said Mr. Reid had no plans to call the Senate into session before its planned Monday afternoon return. That will be just hours before government funding for many federal functions runs out with the end of the fiscal year.

The next step is unclear, as no official business on Capitol Hill is planned for Sunday. There was no sign negotiations were being scheduled among congressional leaders, and no lawmakers—from graybeards to backbenchers—said they were optimistic that a shutdown would be averted.

In a blunt acknowledgment of that prospect, the House early Sunday also approved legislation to ensure that military personnel would be paid in the event of a shutdown.

Republicans have been determined to use the budget deadline as leverage in their long-running battle to undercut the health care law, which reaches a landmark moment on Tuesday, when one of its most important components takes effect. On that day, people can begin to sign up for health insurance policies through new online marketplaces.

"The American people don't want a government shutdown, and they don't want Obamacare," House Republican leaders said in a joint statement about their government-funding bill. "We will do our job and send this bill over, and then it's up to the Senate to pass it and stop a government shutdown."

"Maybe they'll panic and do the right thing for once," Rep. Trent Franks (R., Ariz.) said of the Senate. "Republicans are extremely unified at this point."

House Speaker John Boehner (R., Ohio) was under pressure from conservative House members to carry the fight against the health law as long as possible.

"Pushing until the very, very last minute has been one of the mainstays of the House GOP's negotiating strategy on budget issues," said Stan Collender a former aide to the House and Senate Budget Committees who is now a budget specialist at Qorvis Communications. If House Republicans eventually accede to a simple funding bill, shorn of changes to the new health law, it won't likely be until the 11th hour on Monday, he said.

Some Republicans held hope that the Senate would agree at least to repeal the medical devices tax, giving the House GOP a victory. In votes earlier this year, senators from both parties backed a repeal, but Democrats were unlikely to do so as part of the current budget fight.

Democrats criticized House Republican leaders for moving to pass measures so close to the deadline that were bound to fail in the Senate. The longest-serving member of the House, Rep. John Dingell (D., Mich.) had particularly harsh words.

"This once-deliberative body has been taken over by knaves and know-nothings, content with putting partisan politics ahead of the American people,'' Mr. Dingell said.

He added: "I believe that this current Congress would be incapable of passing the Ten Commandments or even the Lord's Prayer, and today's actions have only further galvanized that belief."

Some 800,000 of more than two million federal workers were furloughed in a 1995 shutdown, with fewer workers affected in a following shutdown that stretched into early 1996. The number who would be furloughed this time is unclear and would vary by agency. The Pentagon has said that 400,000 civilian defense workers would be sent home.

Postal and air traffic control services would continue, and Social Security checks would be mailed. But many federal functions would be suspended, such as surveillance of flu and other diseases by the Centers for Disease Control and Prevention. National parks and museums would close.

Some Republicans said that the bill taken up by the House on Saturday night was unlikely to break the stalemate. In the Senate, Democratic leaders can strike the health care delay and medical device tax amendments with a 51-vote majority, then send the funding bill back to the House.

Lawmakers weren't sure what Mr. Boehner's next step would be in that case.

The House could pass the Senate's funding measure, stripped of provisions related to the health law, and send it to Mr. Obama, as the Senate has insisted. Lawmakers could also buy more time by passing a short extension of funding, perhaps for a week.

But Republicans said they might take another stab at amending the spending bill and dare the Senate to let the government shut down. At the same time, some of the GOP caucus's more centrist members worried about the rapidly shrinking window of time. "I hope it works, but it may not,'' said Rep. Charlie Dent (R., Pa.).

The House bill emerged midday from an uncommon Saturday meeting of the House Republican Conference, where GOP leaders and rank-and-file lawmakers agreed on the details of their bill.

Many House Republicans say their party would likely bear more of the public blame if the government is forced into a partial shutdown. But some argued Saturday that wasn't a reason to shift course.

Republicans said they believed that economic benefits flowing from a repeal of the medical-device tax would offset the loss of roughly $29 billion in revenue over 10 years, the sum that the nonpartisan Congressional Budget Office has estimated the tax will generate.

And some Republicans argued that their proposal to delay the health-care law by one year represented a compromise between their earlier push to defund the law and Democrats' desire to keep it unchanged.

"Just delay this thing for one year—it's really not too much to ask," said Rep. Trey Radel (R., Fla.).

Democrats, by contrast, saw little compromise in the House Republican plan. "It's their way or the highway, and the highway leads over the cliff," said Rep. Sandy Levin (D., Mich.).

In the vote to delay the health law, two Republicans broke from their party to oppose a delay. They were New York Reps. Chris Gibson and Richard Hanna.

Two Democrats voted in favor of the one-year delay: Reps. Jim Matheson (D., Utah) and Mike McIntyre (D., N.C.).

The White House and congressional Democrats are opposed to delaying the health law but have indicated they would entertain changes to improve the bill. But they have firmly opposed talking about even modest changes as part of negotiating the government funding bill.

Write to Janet Hook at janet.hook@wsj.com, Kristina Peterson at kristina.peterson@wsj.com and Siobhan Hughes at siobhan.hughes@wsj.com