Manchin says core bipartisan group supports current plan
Sen. Joe Manchin believes U.S. Senate negotiators are about "80 percent there" in hammering out a deal to both reopen the government and avert a catastrophic U.S. default.
Manchin and Sen. Susan Collins, R-Maine, have led a group of 12 senators in advancing a bipartisan compromise to break the entrenched political stalemate that has kept much of the U.S. government closed since Oct. 1.
Senate Majority Leader Harry Reid, D-Nevada, and Minority Leader Mitch McConnell, R-Ky., both publicly expressed optimism Monday that an agreement could be reached this week.
Reid and McConnell, along with their counterparts in the House of Representatives, were scheduled to meet with President Barack Obama at the White House late Monday afternoon to go over aspects of the plan.
While Manchin said specifics have not been worked out, he said everyone in the Senate was in a "positive position" and hopeful that a deal was close.
"We'll have to see what comes out, but I think we're 80 percent there," Manchin, D-W.Va., said during a Monday afternoon conference call with reporters.
He said the plan being advanced by the bipartisan group of 12 -- six Democrats and six Republicans -- has helped bridge the gap between party leaders and open negotiations.
"I think cooler heads have prevailed and that right now we're in a more positive position," Manchin said. "But it's not over until it's over, and that's when the last vote is cast."
Manchin said the tentative plan being pushed would temporarily fund the government through the end of the year, and allow the U.S. Treasury to continue borrowing funds through early next year.
The plan would also require House and Senate leaders to come together in a conference committee and negotiate a budget that addresses long-term spending.
"This is a chance for a bigger deal, a longer deal," Manchin said. "I'm sick as everyone else out there going through this scenario every three to six months -- it's awful."
Congressional leaders are working on a tight timetable. Treasury Secretary Jacob Lew has warned that the government could exhaust its ability to borrow funds as early as Thursday unless lawmakers raise the country's $16.7 trillion debt ceiling.
The debt ceiling is the legal cap on the amount of money the U.S. government can borrow at any one time. If the government bumps up against the ceiling, it has to begin delaying spending or payments on debt until additional revenue comes in.
Treasury officials should be able to continue making bond payments using incoming revenue during the first several days following Thursday, but they will eventually run out of money to continue making those bond payments.
Investors warn that failing to meet those commitments would cause the value of the U.S. dollar to plummet and interest rates to soar. Rates on one-month Treasury bills due to be paid later this month have already spiked -- albeit from very low levels -- as a result of the impasse.
Mohammed El-Erian, chief executive officer at Pacific Investment Management Co., the world's largest bond fund, told Bloomberg last week a U.S. default would do far more damage than the financial crisis of 2008.
"There is no doubt in my mind that if we do not lift the debt ceiling and if we default, the world goes into recession," El-Erian said. "We are playing Russian roulette, not just with our standing but with the global financial system."
Though, given the stakes, El-Erian said the chance that lawmakers would actually push the U.S. into that situation is "very, very small."
The stock market has whipsawed in recent trading days as news about congressional negotiations has gone from positive to negative and back again.
Manchin said that underscores the importance of making a deal sooner rather than later.
"If we come together and tonight announce a deal, it's very important," he said. "I think it will help substantially solidify the markets.
"But if we don't do it, God help us ... I think it could be devastating," he said.
While Manchin said he has not approached more conservative tea party members in the Senate or House about the plan, he said there is a core bipartisan group supporting the current plan.
They include Republican Sens. Collins, John McCain of Arizona, Mike Johanns of Nebraska, Kelly Ayotte of New Hampshire, Mark Kirk of Illinois and Lisa Murkowski of Alaska.
Democrats include Sens. Amy Klobuchar of Minnesota, Jeanne Shaheen of New Hampshire, Mark Pryor of Arkansas, Heidi Heitkamp of North Dakota, Joe Donnelly of Indiana and Manchin. Independent Angus King of Maine is also a member of the group.
While the temporary spending measure to reopen the government would keep spending at the reduced levels implemented earlier this year as part of the so-called sequester, Manchin said the plan would allow federal agencies more flexibility in how they meet those spending targets.
It also included a tightening in income verification requirements for individuals who qualify for subsidies under the Affordable Care Act, along with a two-year suspension of the law's medical device tax.
With the framework in place, Manchin said he was hopeful the president and leaders from both parties would work together to pass a final version of the proposal before the country defaults.
"Leadership cannot allow the confidence of our country to the world to be desecrated like it is," he said. "I'm asking them to rise to the occasion."
The Associated Press contributed to this report.
Contact writer Jared Hunt at email@example.com or 304-348-4836.