The framework of a Senate deal would raise the nation’s $16.7 trillion debt ceiling until mid-February, and establish a Senate budget committee to replace the sequester cuts.
There were conflicting claims on how long the extension would last, with one aide saying it would go to Feb. 15 and another saying Feb. 7, because the Treasury Department uses maneuvers to stretch assets in such times.
It would immediately reopen the government and fund it until Jan. 15.
The deal on the table between Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY) would require the Senate conference committee would have to report back to Congress by Dec. 13.
Speaker John Boehner (R-OH) did review the framework of the Senate deal just after 3 p.m. on Monday. The Senate Republican conference is set to meet at 5:30 p.m.
Democrats had been pushing for a shorter government-funding deal so that they could take another crack at the sequester cuts, thus moving the date to Jan. 15 would be a concession on their part.
Under the current budget law, spending for 2014 will automatically be reduced by $19 billion to $967 billion exactly 15 days after Congress is scheduled to adjourn.
Senate Democrats had moved the goal post by pushing for sequestration reform, raising the annual discretionary budget to $1.058 trillion. Republicans have pushed to keep the law as is — $967 billion — while moving cuts from defense programs to social programs.
Democrats are already arguing they are, in fact, making a concession to Republicans, because they are locking in current spending levels for two months longer than they initially wanted. Although last week sequester wasn’t even on the table, the Democrats had sensed a fractured Republican caucus may provide an opportunity to raise spending limits, despite public opinion.
“On Jan. 15, that’s when the sequester kicks in,” said a Senate aide. “Funding would be at $988 billion and then the sequester would kick it down to $967 billion.”
Republicans have not seen the concessions they had hoped for, because the deal would do nothing to even delay or end a tax on medical devices included in the healthcare law. Republicans had sought to eliminate or delay that tax, which is already being collected. This makes the Senate deal a long-shot in the House.
Majority Leader Harry Reid does not want to repeal or delay the medical device tax unless Republicans grant Democrats a concession, according to the Senate source.
“Reid pushed back heavily on that,” a second aide said.
Reid has held the position throughout the talks that funding the government and keeping the nation from going into default should not be considered Republican concessions.
Democrats are also considering including language to require income verification for people applying for subsidies through healthcare insurance exchanges set up under Obamacare.
A Democratic aide said that the reform were “a nothing-burger” because it would only enforce existing law, even though Democrats in the deal win a delay until 2015 of an Obamacare reinsurance tax opposed by unions.
Under the healthcare reform law, states are required to set up a transitional reinsurance program aimed at stabilizing premiums. As part of that transition, companies providing health care will be required to pay $63 per covered person in 2014, as well as lower fees the following two years.
Reid and Republican leader Mitch McConnell (R-KY) will need to sell the Senate deal to get it passed by Friday.
They plan to use the 14-month debt-limit extension, which Senate Republican blocked on Saturday, as a means to do so. The existing language would be replaced by any agreement Reid and McConnell finalize in the next several hours or days.