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U.S. Senator Chuck Schumer (D-NY) (L-R), Senate Majority Leader Harry Reid (D-NV), Senator Patty Murray (D-WA) and Senator Dick Durbin (D-IL) stand with a clock counting down to a government shutdown at a news conference at the U.S. Capitol in Washington, September 30, 2013 (Jonathan Ernst/Reuters)
U.S. Senator Chuck Schumer (D-NY) (L-R), Senate Majority Leader Harry Reid (D-NV), Senator Patty Murray (D-WA) and Senator Dick Durbin (D-IL) stand with a clock counting down to a government shutdown at a news conference at the U.S. Capitol in Washington, September 30, 2013 (Jonathan Ernst/Reuters)

Washington shutdown looms larger as Senate rejects bill Add to ...

President Barack Obama sought to pin the blame for a government shutdown on House Speaker John Boehner’s inability to control his Tea Party faction, as last-ditch budget negotiations appeared doomed to fail.  

The president went to the White House press room late Monday afternoon with Democratic and Republican lawmakers apparently willing to miss a midnight deadline to renew the government’s spending authority.

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Mr. Obama said he believed there still was time to find an agreement. The White House said Mr. Obama called Democratic and Repubilcan leaders in the Senate and House of Represenatives Monday evening to urge a resolution.

“My hope and expectation is that in the eleventh hour, once again, that Congress will choose to do the right thing and that House of Representatives, in particular, will choose to do the right thing,” he said.

But with all signs pointing to a shutdown, Mr. Obama also used the opportunity to single out his opponents as the cause of the deadlock. “One faction of one party, in one house of Congress, in one branch of government doesn’t get to shut down the entire government just to refight the results of an election,” he said.

Earlier in the day, it took the Senate less than half an hour to reject a House proposal to tie a government shutdown to amending “Obamacare,” shifting the focus back to Republican Speaker John Boehner and his restive Tea Party caucus.

The House of Representatives on the weekend passed a bill that would keep the government open through December, while delaying President Barack Obama’s healthcare overhaul by a year and scrapping a tax on medical devices.

Senate Majority Leader Harry Reid said then that he would block anything that impeded the Affordable Care Act. He made good on his word Monday when the Senate resumed after a weekend break.

 “We are not changing Obamacare,” Mr. Reid told reporters on Capitol Hill.

Mr. Reid’s refusal to move puts the pressure on Mr. Boehner, who has been unable to convince the hard-line members of his caucus to pass clean legislation that would extend the federal government’s spending authority beyond the end of the current fiscal year at midnight.

Those members, elected with the backing of the Tea Party movement, insist on using the prospect of a government shutdown as leverage in an attack on “Obamacare,” which the president signed into law more than three years ago.

The consensus opinion in Washington now is that Congress will fail to avoid a shutdown.

Mr. Boehner could marginalize hardliners by joining with Democratic representatives to pass the Senate’s budget bill, which would extend current spending authority through the middle of November.

There have been no signals that he is willing to do that. Instead, speculation is that Mr. Boehner again will try to amend the temporary spending legislation to land a blow against “Obamacare.” Mr. Reid said such a move would be a waste of time.

“If they try to send us something back, they are spinning their wheels,” Mr. Reid said.

That appears to be exactly what they intend to do.

Mr. Boehner said at a brief press conference that Republicans had decided to hold another vote Monday evening and then send a new bill to the Senate. Asked if that bill would be the "clean" one that Mr. Reid is seeking, Mr. Boehner said, "That's not going to happen."

Financial markets continued a slow drift downward as investors tried to gauge whether brinksmanship in Washington will force a government shutdown.

The Standard & Poor’s 500 Index slipped 0.3 per cent, and the Dow Jones industrial average 0.8 per cent. In Toronto, the S&P/TSX Index slipped 0.4 per cent.

The reaction to Congress’s failure to bridge their differences over the budget suggests trepidation rather than panic. Democrat and Republican lawmakers have a knack for avoiding the worst at the last second, and there remains time to do so again.

At midnight, the federal government’s fiscal year will end and a new one will begin.

However, the House of Representatives and the Senate are far apart on a budget. Instead, they are trying to agree on a temporary extension of current spending authority. Failure to do so before the end of the day would force the furlough of hundreds of thousands of government workers and the suspension of non-essential services.

Republican leaders in the House insisted on Sunday that they could avoid a government shutdown, although they didn’t say how that could be done.

But that outcome wouldn’t necessarily be disastrous, provided a resolution was found in a matter of days. IHS Global Insight, a research firm, estimates that a week-long shutdown would reduce gross domestic product by two-tenths of a percentage point.

Johnny Isakson, a Republican senator from Georgia, told CNN on Sunday that he could foresee a last-minute decision to keep the government open for a few days to leave more time to negotiate.

Another possibility for compromise circulating Monday is the tax on medical devices, which is opposed by some Democratic lawmakers. There also is speculation that Republicans could back down in an exchange for a commitment to a broader budget negotiation that would overhaul taxes and reduce spending.

All those scenarios are considered long shots.

“I expect a shutdown, and I expect it to be measured in weeks, not days,” said Tony Fratto, a partner at Washington-based consultancy Hamilton Place Strategies and a former spokesman in George W. Bush’s White House.

With files from The Associated Press

Follow on Twitter: @CarmichaelKevin

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