Washington - President Barack Obama and House Republicans, after weeks of
ultimatums, are exploring whether they can end a budget standoff that has
triggered a partial government shutdown and edged Washington to the verge of a
historic, economy jarring federal default.
The two sides continued discussions into the night on Thursday after Obama
and top administration officials met for 90 minutes with House Speaker John
Boehner and other House Republican leaders at the White House.
No agreement was reported and plenty of hurdles remained, but both sides
cast their meeting positively as, for the first time, hopes emerged that a
resolution might be attainable, even if only a temporary one.
Obama planned a late morning White House meeting on Friday with Republican
senators, who said they would present options of their own for ending the
shutdown and debt limit standoff.
A White House statement about Thursday's meeting with House Republicans said
"no specific determination was made" but added, "The president
looks forward to making continued progress with members on both sides of the aisle."
Republican House Majority Leader Eric Cantor said the meeting was
"clarifying for both sides" and that following a night of
negotiations," hopefully we can see a way forward."
The talks were held shortly before a Wall Street Journal/NBC News poll was
released bearing ominous news for the Republicans. It showed more people
blaming Republicans than Obama for the shutdown, 53% to 31%. Just 24% viewed
the Republican Party positively, compared with 39% with positive views of the
Boehner, who brought a proposal to the White House meeting to extend federal
borrowing authority through 22 November, conditioned on Obama's agreeing to
negotiate over spending cuts and the government shutdown. But participants said
the discussion expanded to ways to quickly end the shutdown, which entered its
11th day Friday.
"It's clear he'd like to have the shutdown stopped," Republican
House Appropriations Committee Chairperson Hal Rogers said of Obama. "And
we're trying to find out what he would insist upon" to reopen the
government "and what we would insist upon."
One major problem for Boehner's plan was highlighted by Democratic Senate
Majority Leader Harry Reid. After he and fellow Senate Democrats had their own
White House meeting with Obama, Reid said negotiations before the government
reopens - a key part of Boehner's proposal - were "not going to
Boehner's offer represented give on the part of Republicans, who had been
insisting on cuts to Obama's 2010 health care law and other programmes as the
price for reopening government and extending the debt limit. But they claimed
victory on one front, noting that they were in negotiations with a president
who had said repeatedly there would be none until the government was open and
The speaker's plan - and positive though unenthusiastic words about it from
White House spokesperson Jay Carney - seemed to spark a good day in the
financial world. The Dow Jones industrial average jumped 323 points, or 2.2%.
European Central Bank head Mario Draghi said that while a US default would
inflict "severe damage" on the global economy, the world believes
Washington will "find a way out of this."
The shutdown has idled 350 000 civil servants, prevented the Social Security
Administration from revealing next year's cost-of-living increase for
recipients and curtailed many consumer safety inspections.
The Obama administration has warned that the government will exhaust its
borrowing authority on 17 October and risk being unable to pay its bills and
"It would be a grave mistake" to ignore the risks to the US and
world economy that a default would raise, Treasury Secretary Jacob Lew warned
the Senate Finance Committee on Thursday.
House Republicans' insistence on spending cuts and deficit reduction come
with the 2013 budget shortfall expected to drop below $700bn after four years
exceeding $1 trillion annually.
But their insistence on cuts in the health care law as the price for
reopening government has frustrated many Senate Republicans, who see that
battle as unwinnable.
That has prompted Republican Senate Minority Leader Mitch McConnell and
other Republican senators to seek their own possible resolution to the shutdown
and debt limit fights.
"For the first time there seems to be some movement," Republican
Senator John McCain said after a meeting with McConnell and a half dozen Senate
Republicans. Republican lawmakers said they have reached out to Senate
Republican Senator Susan Collins and others have proposed a six-month
extension of government spending, repeal of the medical device tax and greater
flexibility for agencies to deal with across-the-board spending cuts in effect
McCain said the goal was ending the shutdown and raising the debt limit, but
said, "We will not defund Obamacare," a crucial demand for
Reid has proposed extending the debt limit through 2014, which would boost
the current $16.7 trillion debt limit by around $1 trillion. He has been
planning for a test vote by Saturday on the measure, which has no other
conditions, but Republicans may have enough votes to block it unless he agrees