President calls for new approach after shutdown

President Barack Obama spoke to the nation Thursday morning, calling for both parties to work together on a budget, immigration reform and other issues. Photo courtesy: CNN.

President Barack Obama spoke to the nation Thursday morning, calling for both parties to work together on a budget, immigration reform and other issues. Photo courtesy: CNN.

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Washington (CNN) — The way business is done in Washington has to change to make a positive difference in the economy, President Barack Obama said Thursday as the federal government reopened for business and discussions began in Congress to reach a longer-term budget deal.

That starts, he said, with taking a balanced approach to a responsible budget. Congress should “cut out things we don’t need,” “close corporate tax loopholes that don’t create jobs,” and “free up resources for things that do help the country grow,” like research and infrastructure, he said.

The partial government shutdown and standoff over the debt ceiling ended late Wednesday night when Congress voted on a temporary funding bill that also raised the nation’s borrowing limit.

The standoff “inflicted completely unnecessary damage (to) our economy,” Obama said Thursday morning at the White House. He said it slowed the economy’s growth and set back employers’ plans to hire. “Just the threat of default … increased our borrowing costs, which adds to our deficit,” he said.

“We’ll bounce back from this,” he said of what he called the damage to the economy that the impasse caused. “America is the bedrock of the global economy for a reason … because we keep our word and we (meet) our obligations.”

He then called on Congress to pass a budget, approve changes to the nation’s immigration laws and pass a farm bill.

Before Obama spoke, federal employees returned to work early Thursday to mini coffee cakes from the Vice President, hugs from colleagues, along with eye-rolls about their “vacation” due to the partial government shutdown.

The workers streamed into government offices in Washington, turned on lights and opened national landmarks such as St. Louis’ Gateway Arch that had been closed during the 16-day shutdown.

The protracted brinksmanship flirted with a possible U.S. default before ending when Republicans caved to the insistence of Obama and Democrats that legislation funding the government and raising the federal borrowing limit should be free — or at least mostly free — from partisan issues and tactics.

After all the bickering and grandstanding, the billions lost and trust squandered, the result amounted to much ado about nothing.

“I am happy it’s ended,” Vice President Joe Biden said when he arrived at the Environmental Protection Agency with coffee cakes handed out to returning workers. “It was unnecessary to begin with. I’m happy it’s ended.”

In the basement of the U.S. Capitol, there were exuberant hugs as furloughed colleagues were welcomed back, but there was also bitterness toward the elected legislators in charge upstairs.

A common refrain was the sarcastic question: “How was your vacation?” Responses were often nonverbal — an eye roll, a head shake, an angry glare, the occasional ironic laugh.

The agreement to end the shutdown and avert a potential government default came Wednesday from Senate leaders after House Republicans were unable to get their own caucus to support a GOP proposal.

Hardline Republicans, whose opposition to Obama’s signature health care reforms set the shutdown and debt ceiling crisis in motion, got pretty much zip — except maybe marred reputations.

“To say we as Republicans left a lot on the table would be one of the biggest understatements in American political history,” Republican Sen. Lindsey Graham of South Carolina tweeted.

However, it all amounts to the cliched kicking of the can down the road, because the deal passed by Congress in lightning fashion Wednesday night and signed by Obama in the wee hours of Thursday only funds the government through January 15 and raises the debt ceiling until February 7.

The agreement set up budget negotiations between the GOP-led House and Democratic-led Senate intended to reach a broader agreement on funding the government for the fiscal year that ends on September 30.

Ideally, a budget compromise would ensure government funding and include deficit reduction provisions that would prevent another round of default-threatening brinksmanship in three months’ time.

Obama planned a live statement at 10:35 a.m. ET, about an hour after the leaders of the House and Senate budget committees — Republican Rep. Paul Ryan of Wisconsin and Democratic Sen. Patty Murray of Washington — were having a symbolic breakfast to get the dialogue started.

They noted that their negotiations — called a conference between their two committees to work out differences in budgets passed by each chamber — differed from a special committee set up under 2011 legislation that failed to agree on broader deficit reduction steps.

“Chairman Ryan knows I’m not gonna vote for his budget. I know that he’s not gonna vote for mine,” Murray told reporters, saying the goal was to find “the common ground between our two budgets that we both can vote on.”

Last-minute save

Everything came together Wednesday on a frenzied night of deadline deals.

The Senate brokered a bill to end the shutdown that began on October 1 and raise the debt limit, then passed with broad bipartisan support.

The GOP-led House also passed it, with about 80 Republicans joining a unified Democratic caucus in support, while well over 100 House Republicans voted “no.”

Had Congress not approved a debt limit increase, the government would have lost its authority to borrow more money to pay all of its bills. Social Security checks and veterans’ benefits could have stopped. The markets could have gone into a tailspin.

Approval of the temporary spending plan meant the return to work of more than 800,000 furloughed employees, while more than 1 million others who’ve been working without pay will get paychecks again.

A provision in the agreement guaranteed back pay for government workers for the shutdown.

A temporary bandage

However, the bill that passed Wednesday night doesn’t address many of the contentious and complicated issues that continue to divide Democrats and Republicans, such as changes to entitlement programs and tax reform.

“We think that we’ll be back here in January debating the same issues,” John Chambers, managing director of Standard and Poor’s rating service, told CNN on Wednesday night. “This is, I fear, a permanent feature of our budgetary process.”

Obama said Wednesday night that he’s not in the mood for more of the same, saying politicians have to “get out of the habit of governing by crisis.”

“Hopefully, next time, it will not be in the 11th hour,” he told reporters, calling for both parties to work together on a budget, immigration reform and other issues.

A $24 billion battle

The partial government shutdown that lasted 16 days has come at a steep cost. Standard and Poor’s estimated it took a $24 billion bite out of the economy.

Then there’s the impact it had on politicians’ image. If there’s one thing polls showed that Americans agreed on, it’s that they don’t trust Congress — with Republicans bearing more blame than anyone else for what transpired.

Both sides kept talking past each other, with Republicans insisting for a time that defunding, delaying or otherwise altering Obamacare must be part of any final deal. Democrats, meanwhile, stood firm in insisting they’d negotiate — but only after the passage of a spending bill and legislation to raise the debt without anti-Obamacare add-ons.

In the end, Democrats largely got what they wanted after some last-minute talks by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell.

Reid hailed the agreement he worked out with McConnell as “historic,” saying that “in the end, political adversaries put aside their differences.”

McConnell said any upcoming spending deal should adhere to caps set in a 2011 law that included the forced cuts known as sequestration.

“Preserving this law is critically important to the future of our country,” McConnell said of the Budget Control Act, which resulted from the previous debt ceiling crisis in Washington.

Republicans did get a small Obamacare concession: requiring the government to confirm the eligibility of people receiving federal subsidies under the health care program.

While some Republicans, such as tea party favorite Sen. Ted Cruz of Texas, claimed moral victories in energizing their movement, House Speaker John Boehner didn’t even pretend his side came out victorious.

“We fought the good fight; we just didn’t win,” he told a radio station in his home state of Ohio.

Cruz, despite being in the Senate, is credited with spearheading the House Republican effort to attach amendments that would have dismantled or defunded Obamacare.

All were rejected by the Democratic-led Senate, and Obama also pledged to veto them, meaning there was virtually no chance they ever would have succeeded.

Republican Sen. Kelly Ayotte of New Hampshire called the House GOP tactic of tying Obamacare to the shutdown legislation “an ill-conceived strategy from the beginning, not a winning strategy.”

Markets mixed after agreement

Wall Street sighed with relief. U.S. stocks rose Wednesday on the news of an agreement. The benchmark Dow Jones Industrial Average jumped more than 200 points on the day. But U.S. stocks fell at Thursday’s opening, with investors discouraged by poor corporate results.

In addition, world markets had a tepid reaction Thursday, with markets mixed in Asia.

What’s next

The Senate’s Democratic leader said he never wants to go through the recent turmoil ever again.

“Let’s be honest: This was pain inflicted on our nation for no good reason, and we cannot make — we cannot, cannot make — the same mistake again,” Reid said Wednesday.

But former House Speaker Newt Gingrich predicts the tea party and staunch conservatives in the GOP will be more energized after not getting the anti-Obamacare amendments they wanted.

“They will be more embittered, more angry. They will find more ways to go after Obama because they can’t find any way to get him to negotiate,” he said, adding that he expects Obamacare to become the defining issue of the next two elections cycles.

As Obama walked away from a news conference Wednesday night, he was asked whether he thought America would be going through this brouhaha again in a few months.

His answer: “No.”

We’ll see.

By Holly Yan. Tom Cohen and Greg Botelho, CNN

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