Obama, Democrats push bill to end closure

Zachary A. Goldfarb / The Washington Post /

Published Oct 8, 2013 at 05:00AM

WASHINGTON — President Barack Obama and Senate Democrats tried Monday to break a political logjam that could threaten the U.S. economy, advancing legislation that would raise the federal debt ceiling as soon as possible.

Democrats said they will attempt to force Republicans to agree to a long-term $1 trillion debt-limit increase to ensure that the government does not reach a point this month where it may be unable to pay its bills, risking its first default. They said they also may accept a short-term bill, perhaps lasting only weeks, if necessary to avoid going over the brink.

The Democratic push on the debt limit came as a partial government shutdown entered its second week with no solution in sight. New polling showed that the fiscal standoff is hurting Republicans far more than it is Obama, although no party is faring particularly well.

A Washington Post-ABC News survey found that 70 percent of Americans disapprove of the way Republicans are handling budget negotiations, up from 63 percent last week, with 24 percent approving.

Obama’s approval rating on budget matters ticked up slightly over the same time period — from 41 percent to 45 percent — but 51 percent disapprove. Obama’s Democratic colleagues in Congress are faring worse, with 61 percent of Americans disapproving, up from 56 percent before the shutdown.

In a hastily arranged visit Monday to the headquarters of the Federal Emergency Management Agency, Obama said he will not bow to Republicans’ demands that he enter negotiations with them or risk a continued shutdown or a default.

“I cannot do that under the threat that if Republicans don’t get 100 percent of their way, they’re going to either shut down the government or they are going to default on America’s debt,” he said.

Republicans remained undeterred, saying they would neither raise the $16.7 trillion debt ceiling nor reopen the government without first winning concessions.

Lawmakers have little time to resolve the impasse. After Oct. 17, the Treasury Department says it cannot guarantee that it can pay all of the government’s bills, and independent analysts say the government would have less than two weeks before a default.

Financial markets on Monday sounded alarms about the brinkmanship. The stock market fell, with the Standard & Poor’s 500 index down 14.38 points, to 1676.12. Volatility spiked. Short-term borrowing costs for U.S. taxpayers reached their highest point in nearly a year.

Later this week, Senate Majority Leader Harry Reid, D-Nev., hopes to open debate on a bill that would raise the debt, aides said. To do so, he would need the support of all 54 Senate Democrats and six Republicans — a goal that seemed possible Monday, but is far from assured.

Meanwhile, if any senator objects to the proposal, procedural hurdles would prevent the measure from clearing the Senate and reaching the House until Oct. 15 — two days before the Treasury Department’s deadline.

Several Republican senators left the door open to supporting a “clean” debt-limit bill, but said it would depend on whether Democrats were willing to enter talks on broader budget reforms.

“I don’t know what the dynamics are here. I don’t know what’s being offered. It’s too early,” said Sen. John McCain, Ariz., who nonetheless held out hope. “I’m going to have to wait and see.”

But senior GOP aides said any debt-limit proposal in the House is likely to need significant conservative sweeteners to be considered.

House Speaker John Boehner, R-Ohio, sharply criticized Democrats for not coming to the negotiating table.

“Now, the American people expect when their leaders have differences, and we’re in a time of crisis, we’ll sit down and at least have a conversation,” Boehner said on the House floor. “Really, Mr. President, it’s time to have that conversation before our economy is put further at risk.”

The difficulty of achieving an agreement was underscored Monday when Senate Republicans said they might try to amend legislation — which the House passed unanimously over the weekend — to retroactively pay federal workers who are furloughed by the shutdown.

Texas Sen. John Cornyn, the second-ranking Senate Republican, suggested that he would be uncomfortable passing the legislation without first trying to add a series of piecemeal measures designed to lessen the effect of agency closures.

Senate Democrats said they still plan to hold an up-or-down vote on the retroactive pay measure later this week, and aides predicted it would still pass overwhelmingly.

Default threat generates fear around globe

The bitter fiscal stalemate in Washington is producing nervous ripples from London to Bali, with increasing anxiety that the United States might actually default on a portion of its government debt, set off global financial troubles and undercut fragile economic recoveries in many countries.

Five years after the financial crisis in the United States helped spread a deep global recession, policymakers around the world again fear collateral damage, this time with their nations becoming victims not of Wall Street’s excesses but of a political system in Washington that to many foreign eyes no longer seems to be able to function efficiently.

There is plenty of evidence that the United States remains engaged globally on many levels, with the dual commando raids on targets in Africa this weekend the most recent. But the partial shutdown of the U.S. government has shown again that Washington’s problems extend beyond American borders. Effectively grounded by the political crisis at home, President Barack Obama was absent from a summit meeting of Pacific Rim leaders in Indonesia on Monday, giving China greater opportunity to highlight its role in the region.

One of the attendees, President Vladimir Putin of Russia, provided a possibly sardonic statement of sympathy for Obama. “We see what is happening in U.S. domestic politics and this is not an easy situation,” Putin said, adding, “If I was in his situation, I would not come, either.”

In Europe, the effort to reach a big new trade accord with the United States is at a standstill, with many government agencies in Washington operating with skeletal staffs. And as worrisome as that kind of delay is in Europe, it is only a precursor to the almost certain economic fallout if the United States does not raise the debt limit and defaults for the first time on government securities.

Foreigners often complain, usually with some forbearance, that the United States is so powerful that its president is in some important sense their president, too. In their case, however, they lack the opportunity to cast a vote.

There is not much that any foreigner can do about Obama’s confrontation with House Speaker John Boehner, who said Sunday that his Republican members would not accept a clean bill — one with no conditions — that would raise the American debt limit before the government hits its borrowing limit and risks technical default as soon as next week. At the same time Boehner has told colleagues privately that he would avert a default, but whether he actually has the ability to do so remains uncertain.

— New York Times News Service

comments powered by Disqus