Debt limit overtaking shutdown

Gridlocked Congress shows no urgency in avoiding default
Associated Press
Oct 7, 2013

A market-rattling federal default loomed and the partial government shutdown lingered on Monday, but a gridlocked Congress betrayed little or no urgency toward resolving either of the nation's most challenging short-term economic disputes.

Stocks got a case of the jitters on Wall Street, and halfway around the world China stressed the importance for the global economy of raising the U.S. debt limit.

"Safeguarding the debt is of vital importance to the economy of the U.S. and the world," Vice Finance Minister Zhu Guangyao said, according to the official Xinhua News Agency. China holds $1.277 trillion in U.S. Treasury bonds, second only to Japan.

At home, the political rhetoric was unchanged — and generally uncompromising — while a new poll suggested Republicans are paying a heavier price than Democrats for the deadlock.

President Barack Obama said the House should vote immediately on ending the partial closure of the federal establishment. He accused House Speaker John Boehner of refusing to permit the necessary legislation to come to the floor because he "doesn't apparently want to see the ... shutdown end at the moment, unless he's able to extract concessions that don't have anything to do with the budget."

Boehner, in rebuttal, called on Obama to agree to negotiations on changes in the nation's health care overhaul and steps to curb deficits, the principal GOP demands for ending the shutdown and eliminating the threat of default.

"Really, Mr. President. It's time to have that conversation before our economy is put further at risk," the Ohio Republican said in remarks on the House floor.

Obama said he would talk with the Republicans on those topics or virtually any others. But the White House has said repeatedly the president will not negotiate until the government is fully re-opened and the debt limit has been raised to stave off the nation's first-ever default.

White House aide Jason Furman told reporters that if Boehner "needs to have some talking point for his caucus that's consistent with us not negotiating ... that's not adding a bunch of extraneous conditions, of course he's welcome to figure out whatever talking point he wants that helps him sell something."

The current standoff is the latest in a string of clashes over the past three years between Obama and a House Republican majority that has steered to the right with the rise of the tea party.

Most Democrats and many Republicans have assumed the GOP will pay a heavier price for a shutdown than the Democrats, since that was the case in 1996.

And a survey released by the Washington Post-ABC said disapproval of Republicans was measured at 70 percent, up from 63 percent a week earlier. Disapproval of Obama's role was statistically unchanged at 51 percent.

In the Senate, where majority Democrats forced approval of legislation before the shutdown aimed at preventing it, officials said Majority Leader Harry Reid was drafting a bill to raise the current $16.7 trillion debt ceiling before the Oct. 17 deadline when Treasury Secretary Jacob Lew has said the government will reach its borrowing limit.

The measure would allow the government to meet its borrowing needs through the 2014 elections, officials said, although few details were immediately available.

Assuming Democratic support, the bill could pass the Senate quickly if Republicans merely vote against it as they press for concessions from the White House. But passage could be delayed until Oct. 17 if the GOP decides to mount a filibuster.

Separately, a White House aide said Obama would be receptive to an interim, short-term measure to prevent default.

In the House, Republicans declined to say when they would put debt limit legislation on the floor for a vote.

Instead, the public agenda for the day consisted of legislation to reopen the Food and Drug Administration, the latest in a string of measures to soften the impact of the partial shutdown.

Earlier House-passed bills would end the shutdown at national parks, the National Guard and Reserves and the Women, Infants and Children nutrition program, and ease effects for the Washington, D.C., government, among other locations. Each of the measures cleared the House with some Democratic support.

Yet each is under a veto threat by the White House, and Reid opposes them in the Senate as far less than the full restoration of government services that most Democrats favor.

Still, the shutdown eased over the weekend, when about 350,000 civilian defense workers were recalled as the result of legislation Congress passed and Obama signed after the shutdown began.

That left an estimated 450,000 federal employees idle at agencies responsible for domestic programs, ranging from the Departments of Education to Energy, and including Labor, Health and Human Services, Interior, Transportation and more.

The shutdown was felt unevenly, however, because of bewilderingly complex rules and the ability of senior officials to declare some projects essential and therefore allowed to remain open.

Some routine food checks by the FDA were suspended, but the Department of Agriculture's meat inspections continued uninterrupted. Much of the nation's space agency was shuttered, although work continued on plans to launch a robotic probe to Mars, which has a once-every-two-years launch window.

Despite the order returning civilian Pentagon workers to their government jobs, defense contractor Lockheed Martin announced it would furlough about 2,400.

The Federal Emergency Management Agency, where Obama visited, served as a demonstration for the variable impact of the partial shutdown.

Officials said the agency had furloughed about 86 percent of its workers, then had recalled about 200 of them last week to prepare for the threat posed by Tropical Storm Karen in the Gulf Coast region.

With the threat passed, Obama said at least 100 of them have been re-furloughed.

"That's no way of doing business," he said.

Whatever the shutdown's inconveniences, it was easily rivaled by the warnings over a default, in which the United States would not be able to pay all its bills.

"A default would be unprecedented and has the potential to be catastrophic," a Treasury report said. "Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world."

Private economists generally agree that a default on the U.S. debt would be extremely harmful, especially if the impasse was not resolved quickly.

Lew has said that while Treasury expects to have $30 billion of cash on hand on Oct. 17, that money would be quickly exhausted in paying incoming bills given that the government's payments can run up to $60 billion on a single day.

 

Comments

Huron_1969

Reid and Boehner are playing a game of chicken and Obama is the referee

The Big Dog's back

The Senate passed a clean bill and is waiting for bonehead to put it up for a vote.

Huron_1969

Clean bill = business as usual, over spend and spend some more
These clowns (both parties) need a reality check instead of a pay check

The Big Dog's back

A clean bill does not equal business as usual.

Truth2u

But the biggest bonehead is you Dog. Your posts seldom have supportive content and when you try to provide any its always distorted and contains little factual truth. One thing you are constant about is your lack of logic and saturation of racial bigotry.

shucks

Nah

puddin95

Did they already raise the debt limit this year?

grumpy

From what I can find, and also remember the last time was August 2011.

The Big Dog's back

Wrong.

bobshumway92

barack HUSSEIN obama will save us!

Pterocarya frax...

feel better?

bobshumway92

Yes I do. Thank you for axin.

The Big Dog's back

Now maybe you can think clearer. But 1st turn off faux news.

bobshumway92

Come on yo I be watchin msnbc yo

Pterocarya frax...

I don't think you are. Just let it all out. It will set you free.

bobshumway92

All day msnbc yo

Darwin's choice

"10 tendencies of a dictator

--------------------------------------------------------------------------------

1) Create a larger than life personification (cult of personality)

2) Control the national media (through force or preferential treatment)

3) Spy on their own citizens and especially those in opposition

4) Create a system where their power can go unchecked (usurp power that wouldn't ordinarily be given to such a position)

5) Use propaganda to target the ignorant, the old and the youth (state sponsored propaganda)

6) Extreme narcissism

7) Hold highest position in military

Remove themselves from the ordinary citizen and the ordinary citizens problems yet gives the appearance they are fighting for the ordinary citizen.

9) Control the election processes to ensure power is retained (through force or voter fraud)

10) Remove as much ability as possible for ordinary citizens to revolt (strip rights to free speech, bear arms and refusal to have obtain their secure person)"
Hey, I know this guy......

shucks

You're crazy.

2cents

Yeppers! Lives here N 38° 53' 51.723", W 77° 2' 11.4972"

Truth2u

Great post Darwin.

Gardenman

I am glad the President has not blinked. He is not going to negotiate,,,there is nothing to negotiate. As said ACA is law and no group be it ultra conservatives, Tea Party, whatever they wish to be called can hold the country and its people hostage.

They will not win this nor will the President bow down to their wishes. I think many of the ultra conserservatives see now the handwriting on the wall they are going to lose this and they stand to lose big in 2014. This may well be their Waterloo and the start of their demise.

No extreme group like this has ever prevailed in our country's history for long. This group too will also pass away into the history books.

shucks

I agree.

Say , buh bye , Republican Party.

grumpy

"As said ACA is law"
So is the debt ceiling. It is law. With your reasoning there is no reason for it to be changed. There should be no negotating for that to be raised. It is law and should not be changed. It is called a circular firing squad. No change on one law, no change on the other. Let the leader(?) lead. You should be happy if laws are followed and won't be changed. As said the debt ceiling is law. Just as ACA is law. I bet the dims will be calling for the debt ceiling law to be changed.

Darwin's choice

Good point, the cheerleaders will conviently dodge this!

As well as any other "laws" that Obama chooses to ignore.

The supposed "Harvard Law Professor" ignores what doesn't suit him....

The Big Dog's back

Did you read the debt ceiling "law"? Obviously not.

KnuckleDragger

The repubs are going about it all wrong, that is what is hurting them as a party. They should allow the ACA to stand with no changes. I have read the whole document cover to cover for my doctoral dissertation. I can assure you that if left to stand as it is now, it will collapse under its own weight. The dems would then be left as the only ones to blame for the mess they created. It's really hard to blame the other side when a bill was passed without a single vote from the other party.

meowmix

They issue Doctorate degree's in Clown College?

shucks

Wow meow !

shucks

A doctor !!? In bullshitting ?

The bar to be a doctor must be lying on the ground.

The Big Dog's back

Well golly gee knucklehead, I feel so much more informed by a doctoral candidate. Dr. knucklehead, how fitting.

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