Staff-level talks between House Republicans and President Obama over a government funding bill are entering into day two after no decisions were made last night, according to two sources.

But one of the most interesting shifts is in who’s not involved: Senate Majority Leader Harry Reid.

Back before the government shutdown and before the fault lines of the current situation became clear, many Republicans viewed Reid, not Obama, as their most likely negotiating partner on both the continuing resolution and the debt ceiling. As evidenced by their public bickering over who wronged whom in the 2011 debt-ceiling fight this week, Speaker John Boehner and Obama do not have a history of fruitful negotiations.


As time wore on, though, Reid made clear not only that he himself wouldn’t budge, at all, on either debate, but that he was actively taking steps behind the scenes – like sidelining Vice President Joe Biden from any role – to ensure Obama toed the line as well.

Reid took several steps that unnerved Republicans who began to fear his healthy self-esteem had turned to hubris, among them his decision to leak e-mails from Boehner’s top aides.


“We thought we would be dealing with Reid, now it looks like we’re going to have to deal with Obama,” says one House GOP aide, describing the situation.

These days, it’s Obama aides interfacing with Boehner’s and Appropriations chairman Hal Rogers’s aides, with no one from Reid’s camp actively involved.


Meanwhile, the House is adjusting its approach. On a recent conference call, sources add, it’s clear that GOP leadership will keep pushing for a small Obamacare-related concession, but that they know they may not be able to win one, especially as the debt-ceiling deadline nears.

There’s also growing political pressure to get a deal done. A new poll from NBC and the Wall Street Journal is putting a new sense of fear into the hearts of House Republicans. The poll showed Republicans’ favorability had dropped to its lowest rating ever for that poll while Obama’s ratings remained stable.

Still, Boehner allies fear a CR without something in it related to Obamacare would face the wrath of the right flank of the conference. However, Republican Study Committee Chairman Steve Scalise suggested on CNBC last night he would be fine with some concessions unrelated to the health-care law.


The options on the table for a small Obamacare win are the same that have been talked about for some time: delaying the individual mandate, repealing the Independent Payment Advisory Board, repealing the medical-device tax, and eliminating the Obamacare subsidy for congressional staffers.


The item that comes up by far the most with top Republicans is the medical-device tax, which is viewed as the most likely option for several reasons. First, there are big lobbying dollars behind killing it from the companies that are subject to it, and many of those companies are headquartered in blue states full of Democrats. Second, repealing the tax already passed the Senate with 79 votes. Third, it’s a tiny part of the health-care law and not crucial to its success.

One final note: If no deal is reached, many federal workers will miss their first paycheck today. Lawmakers are not taking the issue lightly, and one step they have already taken is to beef up security at their district offices, fearing an onslaught of angry federal employees. That could add pressure on House Republicans already feeling the heat.