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Government Shutdown Looms as Democrats Defeat House Bill

Congress remains hopelessly divided over how to fund disaster aid, an impasse that could result in a government shutdown if not solved by September 30. But lawmakers face a more pressing deadline. Currently, the Federal Emergency Management Agency's Disaster Relief Fund (DRF) is poised to run out of cash by Tuesday, if not earlier, with the account at the dangerously-low level of $175 million, according to Senate aides.

Senate Democrats on Friday defeated a House GOP-backed stopgap Continuing Resolution (CR) to fund the government through November 18 by a vote of 59-36. The $1.04 trillion measure contained $3.7 billion for disaster aid, $200 million of which was offset by cuts to green energy programs, including a loan account that once helped fund the now-defunct, controversial solar panel firm Solyndra.

"This is really not the time to say we're going to balance the budget on the backs of those hit by natural disasters," cried House Minority Leader Nancy Pelosi, D-Calif, as she joined Senate Majority Leader  Harry Reid, D-Nev., and other Democratic leaders accusing Republicans of killing jobs.

"We shouldn't play politics with disasters," accused the Senate's Democratic Whip, Dick Durbin of Illinois. 

Reid then took the House measure, stripped the offsets, and offered a new substitute amendment. A procedural vote is set for Monday night in the Senate, but the chamber's GOP leader, Mitch McConnell, predicted that bill's demise.

"I'm pretty confident it will not (pass)," the Kentucky Republican said to Reid as he pushed his Democratic counterpart for an immediate test vote.

But Reid chose to wait, predicting, "We'll come here Monday. More reasonable heads will prevail, and I would hope over the weekend that the four leaders can lead their troops in the right direction."

McConnell said Democrats should accept offsets, even though that has not been the practice in the past. The GOP leader said times have changed. 

"Our friends on the other side don't like the idea. They'd rather just add these funds to the deficit. Why?," McConnell asked. "Because they say that's the way we've always done things around here. Well, I think there's a lesson we can draw from the debates we've been having here over the last six months, is that the American people won't accept that excuse any longer."

A path forward remains very much unclear at this point. Republicans appeared in no mood to compromise.

"Harry Reid is holding a bill up with full funding of what is needed right now for no reason - no reason but for politics. Again, this is why the people just don't have the respect for this institution and this town anymore," charged House Majority Leader Eric Cantor, R-Va.

Still, no one wants a government shutdown, and it was clear Cantor has left the door open to a compromise. He would not say the House would adjourn for a scheduled week-long recess in observance of the Jewish high holidays.

Pressed after a news conference, Cantor said that if the House had to work into next week's scheduled time off, "It's because Harry Reid is playing politics."

Fox's House Producer John Brandt contributed to this report.