Congress lumbers as default looms
WASHINGTON—Republicans and Democrats in Congress failed to make any significant progress toward a deal on Saturday even as a threatened default by the Treasury crept uncomfortably closer and a partial government shutdown neared the end of its second week.
Lawmakers in both parties said they were watching for the reaction to the political uncertainty by the financial markets when they reopen after the weekend.
There are two issues at play: the US government has been partially shut since Oct. 1 because of Congress’ failure to pass a normally routine temporary spending bill. Separately, Obama wants Congress to extend the government’s borrowing authority—another matter that usually had been routine.
The focus of efforts to end the government shutdown and prevent a US default shifted to the Senate on Saturday, where Senate leaders were in bipartisan talks aimed at resolving the twin stalemates.
“We haven’t done anything yet” by way of compromise, Senate Majority Leader Harry Reid said, although he and other Democrats said repeatedly there was reason for optimism.
Across the Capitol, a member of the hardcore conservative tea party caucus, Republican Rep. John Fleming, said there was “definitely a chance that we’re going to go past the deadline” of Thursday that Treasury Secretary Jacob Lew had set for Congress to raise the $16.7-trillion debt limit.
Amid meetings in Washington of world finance officials, the International Monetary Fund’s policy committee said the United States needed to take “urgent action” to address the impasse.
World Bank president Jim Yong-kim stressed the urgency forWashington policymakers to reach agreement on raising the debt ceiling before the Thursday deadline set by Lew, saying the economic fallout of failing to act could include increased interest rates, slower global economic growth and falling business confidence.
Such an outcome, he said, would have a “disastrous impact” on poor nations.
President Barack Obama met with Senate Democratic leaders at the White House after accusing Republicans of practicing the politics of extortion. “Manufacturing crises to extract massive concessions isn’t how our democracy works, and we have to stop it,” Obama said in his weekly radio and Internet address.
Ironically, though, House Republicans who triggered the shutdown with tea party-driven demands to eradicate Obama’s health law conceded that they had temporarily been reduced to virtual bystander status.
“The Senate needs to hold tough,” Republican Rep. Greg Walden quoted Speaker John Boehner as telling House Republican lawmakers in a private meeting on Saturday morning. “The president now isn’t negotiating with us.”
One day after talks between theWhite House and House Republicans fizzled, the focus turned to the Senate.
There, a meeting of Reid, Republican leader Mitch McConnell and two other lawmakers produced no immediate sign of progress. Later, Reid and his top lieutenants spent more than an hour at the White House with Obama and senior White House aides, including Obama’s chief of staff, Denis McDonough. The leaders left without speaking and the White House offered no summary of themeeting.
Senate Democrats rejected a stab at compromise led by moderate Republican Sen. Susan Collins, while Republicans blocked the advance of a nostrings attached measure the Democrats drafted to let the Treasury resume normal borrowing. The party line vote was 53-45, seven short of the 60 required under Senate procedural rules.
In disagreement was a pair of issues, both important and also emblematic of a broader, unyielding dispute between the political parties over spending, taxes and deficits.
Lew has said that without legislation to raise the debt limit, the government will deplete its ability to borrow money, risking a first-time federal default that could jolt the world economy.
separate measure was needed to reopen the government fully after 12 days of a partial shutdown that has resulted in furloughs for 350,000 federal workers and that administration officials warn could spread hardship if it remains in effect.