BY WILLIAM DOUGLAS, DAVID LIGHTMAN AND LESLEY CLARK McClatchy Washington Bureau
WASHINGTON -- Congressional efforts to raise the nation's debt limit and reopen the shuttered federal government stalled Tuesday as the threat of possible default loomed larger and a top bond rating agency warned of a possible downgrade for U.S. bonds.
What had appeared to be progress in budget talks between both parties in the Senate stopped as House of Representatives Republicans insisted anew on their own plan, a plan that might again prove unacceptable to Senate Democrats or the White House.
"I know I speak for many of us who have been working in good faith when I say that we felt blindsided from the news from the House," said Senate Majority Leader Harry Reid, D-Nev.
In a shot from Wall Street at the dysfunction in the capital, the bond rating agency Fitch Ratings said late Tuesday that it would consider downgrading the AAA rating for U.S. government bonds. Fitch said it would look at the question as the debt fight was all but certain to extend into next year even with a short-term settlement now.
Senate leaders from both parties had worked since Saturday to craft a path that would end the stalemate that has gripped Washington and the nation since Oct. 1. They, and apparently the Republicans who control the House, appear to agree on some key points. They have the same spending levels through Jan. 15 and want to increase the debt limit until Feb. 7. The House also would require a budget conference, or negotiation, on a bigger budget compromise by Dec. 15. The Senate has a deadline two days earlier.
They differed on health care. The House floated the idea of delaying a 2.3 percent medical device tax that would help pay for the Affordable Care Act. The Senate would end a reinsurance tax paid by unions and other major self-insurers.
House Republicans also were eager to bar contributions for health insurance coverage for members of Congress and top executive branch officials, including President Barack Obama. And they would beef up how the government verifies the incomes of people who qualify for subsidies to help pay for health care coverage.
Following a White House meeting with Obama, House Minority Leader Nancy Pelosi, D-Calif., warned that House Speaker John Boehner, R-Ohio, had better be prepared to pass the plan with only Republican votes if it contains provisions unacceptable to Democrats.