There were news conferences and a high-level phone call between
President Barack Obama and House Speaker John Boehner, but no immediate
sign of progress on reopening the government a week into a partial
shutdown or reaching a deal to avoid the first-ever U.S. default next
week.
Obama called Boehner on
Tuesday morning, and the White House then announced the president would
make a statement and take some questions from reporters at 2 p.m. ET.
Earlier, Boehner demanded
that Obama and Democrats negotiate with Republicans on steps needed to
end the shutdown that began on October 1 and raise the nation's debt
ceiling before the deadline for default on October 17.
"Americans expect us to
work out our differences, but refusing to negotiate is an untenable
position," Boehner said, adding that Obama and Senate Majority Leader
Harry Reid are "putting our country on a pretty dangerous path" by
rejecting GOP calls for talks.
Obama has refused to
negotiate on the shutdown or debt ceiling, calling the need to fund the
government and increase its borrowing power constitutional
responsibilities that must be free of partisan politics.
The White House and Boehner's office agreed that little changed in the phone call Obama made to the speaker at 10:45 a.m.
Boehner spokesman Brendan
Buck said Obama reiterated his refusal to include the debt ceiling and a
short-term spending plan to end the shutdown in negotiations on broader
policy issues.
A White House statement
said Obama "is willing to negotiate with Republicans -- after the threat
of government shutdown and default have been removed -- over policies
that Republicans think would strengthen the country."
Obama also urged Boehner
to allow a vote in the House on the Senate-passed measure to reopen the
federal government, and called for quick action on raising the debt
limit, the White House statement said.
In both cases, Obama
said the House should pass "clean" proposals that don't have partisan
amendments pushing GOP priorities, according to the statement.
Economists warn that
failure to increase the amount the government can borrow to pay its
bills would mean a spike in interest rates that would ripple through the
U.S. economy, as well as other ramifications.
"If there was a problem
lifting the debt ceiling, it could well be what is now a recovery would
turn into a recession or even worse," Olivier Blanchard, an
International Monetary Fund economist, said Tuesday.
The shutdown that began
when Congress failed to authorize government spending for the new fiscal
year that started October 1 entered its second week, while the October
17 deadline to raise the debt ceiling looms ahead for political leaders
locked in partisan stalemate.
Boehner and conservative
Republicans want to leverage the situation to wring concessions on
deficit reduction and Obama's signature health care reforms from the
White House and Democrats.
So far, the president
and Senate Democrats have rejected the GOP efforts, causing the impasse
that is escalating public anger against all the parties involved,
especially Republicans, according to recent polls.
To keep up pressure on
Obama and Democrats, House Republicans will propose a measure to set up
negotiations on the debt limit and other fiscal issues, as well as one
to guarantee paychecks for essential government workers are issued on
time during the shutdown, GOP sources said Tuesday.
Rep. Tom Cole of
Oklahoma, a GOP leader in the House, said a negotiating committee with
Democrats and Republicans from both parties could pass a short-term
extension of the debt ceiling while doing its work.
"I suspect we can work
out some mechanism to raise the debt ceiling while negotiations are
under way but we're not going to simply raise it without talking about
the deficit," Cole said. It was unclear if his description would satisfy
Obama's insistence that the debt ceiling increase must be separate from
political negotiations.
Democratic Sen. Chuck
Schumer of New York called the GOP proposals the latest in a series of
"new gimmicks" that avoid the need to reopen the government and raise
the debt ceiling before broader negotiations.
"We have a simple plea
with them: Let's open up the government, pay our debts, and then we'll
discuss anything they want in a forum in which they want to discuss it,"
Schumer said. "It's more of the same right now."
Boehner didn't mention
the GOP proposals at a morning news conference, but he told reporters he
wanted "conversation" with Obama and Democrats "to resolve our
differences." Asked about any preconditions for such talks, Boehner said
he wasn't "drawing any lines in the sand."
In the Senate, Reid
could file a proposal as soon as Tuesday to raise the debt ceiling
without addressing any deficit reduction issues demanded by Republicans,
a Senate Democratic leadership aide told CNN.
Sources told CNN that
the Democratic plan would resolve the debt ceiling issue for at least a
year, and perhaps through the 2014 congressional elections.
The move would be the
first volley in what will be a torturous political struggle in coming
days over the federal borrowing limit leading up to next week's deadline
to raise it.
Most Republicans would
shy away from a bill that doesn't specify spending cuts or other policy
changes in return for the increased borrowing authority.
Photos: Key players in the shutdown debate
Democrats are hopeful
some Republicans would vote across the aisle to prevent the potentially
catastrophic economic repercussions of a default.
If Senate Republicans
require all the time-consuming steps available to them to delay action
on the debt ceiling measure, a final vote might not take place until two
days before the deadline for raising the borrowing limit, the
Democratic aide said.
Such a Senate measure
would increase pressure on the GOP-controlled House to do the same. But
Republican House leaders have made clear they will insist on concessions
from Democrats before agreeing to raise the debt ceiling.
Obama reiterated Monday that he will not negotiate with Congress while the country was under threat of a possible debt default.
"We're not going to
establish that pattern," Obama said, adding that "we're not going to
negotiate under the threat of a prolonged shutdown until Republicans get
100% of what they want" or under the threat of "economic catastrophe."
At the same time, the
White House signaled a willingness to accept a short debt limit increase
that would allow time for broader negotiations.
White House spokesman
Jay Carney told reporters that "I'm not ruling out" a debt ceiling
increase of any particular length of time, adding he believed a longer
one was better because it would provide certainty after what Obama
characterized as "manufactured crises" over similar brinkmanship in
recent years.
"Our position is only
that it ought not to be a political football, because it's a dangerous
political football," Carney said. "And you know, fumbling that football
can cost you a lot more than seven points. It can tank the economy."
Economists warn of dire
fiscal impacts from failing to raise what is called the debt ceiling,
such as a reduced U.S. credit rating that would spike borrowing costs.
The economic blow and questions about America's fiscal fidelity could
bring a global slowdown, Obama has warned.
Boehner and Republicans
kept up the pressure on Obama to negotiate with them over the debt
ceiling, characterizing it as an unprecedented unwillingness by a U.S.
president do so.
"There's never been a
president in our history that did not negotiate over the debt limit.
Never. Not once," Boehner said Tuesday, adding that Obama negotiated
with him over the debt ceiling in 2011.
On Monday, Senate
Minority Leader Mitch McConnell later said divided government means the
two parties have to negotiate solutions.
"Until Senate Democrats accept that reality, these crises will only be harder to resolve," McConnell, R-Kentucky, said.
However, one of Obama's
top economic advisers, Gene Sperling, told a Politico breakfast on
Monday that "the era of threatening default has to be over."
"If you sanction through
negotiation the legitimacy of somebody threatening default, then that
is going to happen over and over again," Sperling said. "So sanctioning
negotiations with someone threatening default is not going to end the
risk of default. It is likely to increase the chances that we as a
country eventually default or even perpetually threaten our full faith
and credit."
At issue is how to reach
an agreement to fund the government in the newly started fiscal year
and raise the $16.7 trillion debt limit.
Conservative Republicans
intent on shrinking the government while trying to weaken Obamacare
demand that any agreement on funding and raising the debt limit include
their priorities.
"The debt ceiling is
there for a purpose. It's like the smoke alarm," said House Financial
Services Committee Chairman Jeb Hensarling, R-Texas. "Democrats want to
unplug the smoke alarm, and Republicans want to go out and fight the
fire."
Boehner has insisted
that a deal to raise the debt ceiling must include deficit reduction
steps that would lower costs of entitlement programs such as Medicare,
Medicaid and Social Security.
However, he appeared to
move away from the demand of the tea party conservative wing of his GOP
caucus to dismantle or defund the health care reforms passed by
Democrats in 2010 and upheld by the Supreme Court last year.
Obama and Democratic
leaders want what are known as "clean" measures to fund the government
for a short period and increase the debt limit, with no accompanying
provisions involving contentious deficit reduction measures or GOP
efforts to weaken Obamacare.
Once such measures are
passed, they say, negotiations can take place on a full budget for
fiscal year 2014 that began on October 1 and other issues such as
reducing spending on entitlement programs.
Last week, a House
Republican said on condition of not being identified that Boehner told
GOP colleagues in private meetings he would not allow a government
default to occur. But Boehner has remained adamant that an increased
debt limit requires accompanying spending cuts.
On the shutdown, Obama and Democrats say the House would pass a Senate spending plan to end it if Boehner allowed a vote.
A CNN survey shows that
18 Republicans would join all 200 House Democrats in supporting the
plan, exceeding the 217 majority needed for it to pass. At the same
time, the CNN survey showed that fewer Republicans were willing to join
Democrats in a procedural move called a discharge petition that would
force Boehner to hold a vote.
Cole said Tuesday that Boehner told his caucus at a morning meeting that no such vote would take place.
"He basically said we're
going to have a negotiation" instead of caving to Democratic calls to
vote on the Senate version, Cole said.
Tea party conservatives
forced Boehner to add anti-Obamacare amendments to the Senate spending
plan that would end the shutdown, and the Senate and Obama rejected
them.
According to Cole, the effort to dismantle Obamacare through the budget negotiations appeared dead.
"I think it's been
overtaken by the debt ceiling," he said, adding that one specific
proposal to repeal a tax on medical devices under Obamacare could be
part of the broader negotiations by the special committee being proposed
by House Republicans.
Reid suggested Monday
that the Senate measure would pass the House if put to a vote, and
Americans would realize the government was shut down "for no apparent
reason."
Both Obama and Reid said
Democrats were open to negotiate "anything" -- with the president
specifically mentioning health care -- once the government shutdown ends
and the debt ceiling gets increased.
House Republicans, however, fear losing their leverage in any talks by giving up those two points without any concessions.
In a new national poll
released Monday, most respondents said the government shutdown was
causing a crisis or major problems for the country.
While the CNN/ORC
International survey also indicated that slightly more people were angry
at Republicans than Democrats or Obama for the shutdown, both sides
were taking a hit.
According to the poll
conducted over the weekend, 63% of respondents said they were angry at
the Republicans for the way they have handled the shutdown, while 57%
expressed anger at Democrats and 53% at Obama.
"It looks like there is
more than enough blame to go around, and both parties are being hurt by
the shutdown," said CNN Polling Director Keating Holland.
If Congress fails to
raise the debt ceiling, borrowing money to meet the nation's obligations
won't be possible, CNNMoney's Jeanne Sahadi reported Monday.
Instead, Sahadi
reported, lawmakers would have a few options to choose from that would
have to be implemented right away -- cut government spending for the
military and other discretionary programs by up to 33% every month; cut
mandatory spending such as entitlement programs by 16% every month, and
raise taxes by up to 12% every month.
No comments:
Post a Comment
I like knowing my fans better. Kindly drop your comment using your name/url/Google accounts and not as Anonymous. Thanks for your understanding.