Boehner digs in as U.S. slips toward default

Treasury chief says Congress ‘playing with fire’

WASHINGTON • The United States moved closer to the possibility of the first-ever default on the government’s debt Sunday as Speaker John Boehner adamantly ruled out a House vote on a straightforward bill to boost the borrowing authority without concessions from President Barack Obama.

With no resolution in sight, Treasury Secretary Jack Lew warned Congress is “playing with fire.” He called on lawmakers to quickly pass legislation reopening the government and increasing the US$16.7-trillion debt limit.

The government shutdown precipitated by the budget brinkmanship entered its sixth day with hundreds of thousands of federal employees furloughed, national parks closed and an array of government services on hold.

Mr. Lew said Mr. Obama has not changed his opposition to coupling a bill to reopen the government with Republican demands for changes in the three-year-old health care law and spending cuts.

Mr. Boehner insisted Mr. Obama must negotiate if he wants to end the shutdown and avert a default that could trigger a financial crisis and recession that would echo 2008 or worse. The 2008 financial crisis pushed the country into the worst recession since the 1930s.

“We’re not going to pass a clean debt limit increase,” the Ohio Republican said in a television interview. “I told the president there’s no way we’re going to pass one. The votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us.”

Mr. Boehner also said he lacks the votes “to pass a clean CR,” or continuing resolution, a reference to the temporary spending bill without conditions that would keep the government operating. Democrats argue that their 200 members in the House plus close to two dozen pragmatic

I’m telling you that on the 17th, we run out of the ability to borrow

Republicans would back a socalled clean bill if Mr. Boehner just allowed a vote, but he remains hamstrung by his tea party-strong GOP caucus.

“Let me issue him a friendly challenge. Put it on the floor Monday or Tuesday. I would bet there are the votes to pass it,” said New York Democrat Chuck Schumer.

Mr. Lew warned that on Oct. 17, when he exhausts the bookkeeping manoeuvres he has been using to keep borrowing, the threat of default would be imminent.

“I’m telling you that on the 17 th, we run out of the ability to borrow, and Congress is playing with fire,” he said.

Mr. Lew said that while Treasury expects to have $US30-billion of cash on hand on Oct. 17, that money will be quickly exhausted in paying incoming bills given that the government’s payments can run up to US$60-billion on a single day.