Small step to close budget standoff

Obama, Republicans aim to halt crisis after meeting, hurdles remain

US President Barack Obama and Republicans in the House of Representatives are exploring whether they can end a budget standoff that has triggered a partial government shutdown and edged Washington to the verge of an economy-jarring federal default.

The two sides continued discussions into Thursday night after Obama and top administration officials met for 90 minutes with House Speaker John Boehner and other 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.

"It was a very adult conversation," said Republican Representative Hal Rogers, who attended the meeting. "Both sides said they were there in good faith."

Obama planned a late morning White House meeting on Friday with Republican senators, who said they would present their own options for ending the shutdown and debt limit standoff.

Boehner brought a proposal to the White House meeting to extend federal borrowing authority and avoid default through Nov 22, conditional 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 separate federal government shutdown, which entered its 11th day on Friday.

Congress, under US law, must approve an increase to the federal debt limit so the government can pay its bills. Normally, this is routine, but Republicans had been insisting on cuts and changes to Obama's 2010 healthcare overhaul law and other programs as the price for reopening government and extending the debt limit past next Thursday's deadline.

Boehner's offer indicates some movement away from that strategy, but Republicans 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 default prevented.

The speaker's plan - and positive though unenthusiastic words about it from White House spokesman Jay Carney - seemed to spark a good day in the financial world. The Dow Jones industrial average jumped 323 points, 2.2 percent. 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".

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 poll by The Wall Street Journal/NBC News was released bearing ominous news for the Republicans. It showed more people blaming Republicans than Obama for the shutdown, 53 percent to 31 percent. Just 24 percent viewed the Republican Party positively, compared with 39 percent with positive views of the Democratic Party.

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 happen".

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 Labor Department said on Thursday that 15,000 private-sector workers have filed for unemployment benefits because of the shutdown.

The Obama administration has warned that the government will exhaust its borrowing authority on Oct 17 and risk being unable to pay its bills and face default.

House Republicans' insistence on spending cuts and deficit reduction come with the 2013 budget shortfall expected to drop below $700 billion after four years exceeding $1 trillion annually.

But their insistence on cuts in the healthcare law as the price for reopening government has frustrated many Senate Republicans.

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.

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 this year.

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, but Republicans may have enough votes to block it unless he agrees to changes.

AP-Reuters

(China Daily 10/12/2013 page6)