Shutdown seems all but certain as hours quickly dwindle

By Michael O'Brien, Political Reporter, NBC News

The federal government continued to barrel toward a shutdown at the end of the day as Congress returned to work Monday with little hope of reaching any agreement to continue funding into October.

The impasse between Democrats and Republicans seems as bad as ever, with just hours to go until all but the government’s most essential services cease. Both parties stuck hard to their bargaining positions, spending more time casting blame for the potential shutdown than sitting down with each other at the negotiating table in hopes of crafting an eleventh-hour agreement.

The gamesmanship followed a weekend in which the House, largely along party lines, passed legislation to fund the government through mid-December and delay “Obamacare” for a year – even though Obama has promised to veto such legislation, and Democrats in the Senate warned they would soundly reject such legislation.

Congress has until midnight Monday to avoid a government shutdown that aides on both sides say is likely to happen. Republicans are refusing to fund the government unless the healthcare law is delayed for a year and Democrats believe it should be funded without any conditions. NBC's Peter Alexander reports.

“The Senate decided not to work yesterday,” House Speaker John Boehner, R-Ohio, said Monday morning on the House floor, excoriating his Democratic counterparts in the upper chamber for not returning to Washington on Sunday. “Well my goodness, if there’s such an emergency, where are they? It's time for the Senate to listen to the American people -- just like the House has listened to the American people -- and pass a one-year delay of Obamacare and permanent repeal of the medical device tax.”

To that end, the Senate was set to convene mid-afternoon, at which point majority Democrats will quickly reject the GOP proposal and return the debate to the House.

As the hours before a shutdown dwindled, there were scant negotiations among lawmakers. President Barack Obama was locked in meetings at the White House with Israeli Prime Minister Benjamin Netanyahu before meeting with his cabinet later in the day. On Capitol Hill, plenty of press conferences were on the schedule, but no publicized meetings between House Republicans and Senate Democrats.

In short, there were no signs of the last-minute deal-making that had played out before similar deadlines in the past. The odds of a shutdown seemed high as ever compared to other legislative stalemates in the recent past.

The later hours Monday could see, rather, a frenetic effort by lawmakers to pass government funding legislation back and forth between the House and Senate, with hopes of leaving the other party stuck holding this political “hot potato” once the clock strikes midnight.

Once the Senate returns a “clean” extension of government spending to the Republican House, Boehner will be left to consider several paths forward. He could seek another short-term extension of funding with another scaled-back swipe at Obamacare attached to it – for instance, a provision requiring lawmakers and congressional staff to buy insurance through new health care exchanges, but without the benefit of a subsidy. Boehner might also seek to extend government funding for a few days or a few weeks; he could also choose to relent, and pass the proposal favored by Democrats to extend spending simply at existing levels through mid-November.

Or, the speaker could decide that all options have been exhausted, and allow a shutdown to proceed.

A shutdown would have serious implications for the American economy, which is still struggling to recover from the depths of the 2008-09 financial crisis. But a shutdown – the first since the mid-90s showdown between President Bill Clinton and his Republican adversaries in Congress – would have broad political ramifications for the GOP, as well.

NBC's political director Chuck Todd says that though some Republicans won't budge on their party's stance on the healthcare law, there is a group of Republicans who could convince John Boehner to make a temporary deal.

Amid warnings from a number of Republican elders that a shutdown could damage the GOP and hamper its chances in next fall's midterm elections, a CNN/ORC poll found that Republicans in Congress would shoulder more of the blame for a shutdown. Forty-six percent of Americans said that Republicans on Capitol Hill would be mostly responsible for a shutdown, versus 36 percent who would blame Obama and 13 percent who would blame both.

This sense that Democrats enjoy a political advantage should a shutdown come to pass has emboldened Obama and his allies on Capitol Hill to hold their negotiating position with Republicans.

And if a shutdown does occur at midnight, the political fallout from it could shape a higher-stakes fight as it plays out over the first few weeks of October. Lawmakers have until Oct. 17 to raise the nation’s debt ceiling, meaning the shutdown and the political consequences of it will almost certainly play directly into the politics of a tenser vote over whether to approve more borrowing to fund the government’s existing obligations.

This story was originally published on Mon Sep 30, 2013 11:07 AM EDT