Shutdown crisis: Both sides invited to White House

Senate Majority Leader Harry Reid stands on the Senate steps on Capitol Hill in Washington during a news conference on the ongoing budget battle. Photo / AP
Senate Majority Leader Harry Reid stands on the Senate steps on Capitol Hill in Washington during a news conference on the ongoing budget battle. Photo / AP

President Barack Obama announced plans to invite all Republican and Democratic lawmakers to the White House to talk about the bitter impasse which shut the government and could throw the United States into default.

Obama will begin the process by meeting minority Democrats from the House of Representatives later today, a White House official said.

Republicans in the House and members of both parties in the Senate will be invited in for talks "in the coming days," the official said on condition of anonymity.

The meetings come as Washington lurches closer to an October 17 deadline to raise the US government's statutory borrowing limit.

Failure to do so could see the United States default on its obligations for the first time in its history and spark what the White House warns will be dire economic consequences which could spread around the globe.

The US government, meanwhile, has been shut for eight days, after Congress failed to agree on a budget to finance operations by an October 1 deadline.

Obama refuses to negotiate with Republicans on budget issues until the debt limit is lifted and the government is reopened.

Republican House Speaker John Boehner will not take either step until Obama offers concessions to his House Republican caucus.

The talks with lawmakers are not meant as a sign Obama is climbing down on his refusal to enter serious negotiations before the immediate crisis has passed.

They may also be designed to defuse Republican charges that the president is obstinately opposed to dialogue with his foes, which have been adopted by Republicans in an attempt to spread the blame for the impact of the shutdown.

While both sides are locked into their positions, and no in-depth negotiations are taking place, there were some signs of political maneuvering Wednesday that could indicate key players are looking for an end game.

Republican Paul Ryan, seen as a philosophical touchstone for conservatism in the House, weighed in on the debate, after a period in which he stayed behind the scenes, with an op-ed article in the Wall Street Journal.

Ryan rebuked Obama for not negotiating over the debt ceiling - saying presidents had repeatedly done so in the past.

The Wisconsin congressman and former vice presidential nominee called for a wide discussion about budgetary policy, and offered Democrats a conversation about reining in some spending cuts in return for concessions on the funding of social programs.

"To break the deadlock, both sides should agree to common-sense reforms of the country's entitlement programs and tax code."

While the article broke little new ground, it did not mention defunding Obamacare, the president's legacy-enhancing health law which Republicans have been trying to cripple in return for opening the government or raising the debt ceiling.

Lawmakers were also Wednesday chewing over Obama's offer to accept a short-term extension to the debt ceiling and temporary government financing to forestall the immediate crisis, which has sparked alarm over possible economic impacts around the world.

Chris Van Hollen, a senior Democratic congressman, said there was a "little glimmer" of hope for a way out.

"It depends on whether Republicans on the Hill are willing to ... jump on it," Van Hollen said.

It remains unclear, however, whether Boehner has the votes within his own party to push forward a short-term solution to the impasse.

The Republican speaker has been unwilling to rely on Democratic votes to build a majority in the House, apparently fearing that a backlash from conservative Tea Party members could put him out of a job.

There were worrying signs for the White House Wednesday as more and more Republicans broke cover to pour doubt on Obama's warnings that failing to raise the debt ceiling would cause an economic catastrophe after October 17.

Some conservative lawmakers argue that the government would have enough money coming in from tax revenues to make good on its obligations to bond holders and would simply have to prioritize its spending.

"Here's the thing that all the media does. They say default equals not raising the debt ceiling," said Republican Senator Tom Coburn on CNN.

"That's not true. That is not true. Those two are two different and distinct things.

"So I'm not saying we shouldn't pay our bills. What I'm saying is we should put ourselves in the position to where we have to start making hard choices now."

Obama, a day after giving a White House news conference dominated by debt ceiling questions, was to keep up the pressure Wednesday by conducting interviews with several television stations from strategically important political regions.

Global stocks, meanwhile, slid again Wednesday on fears that the debt ceiling crisis was no nearer to resolution.

The Dow Jones Industrial Average was down 0.12 per cent to 14,758.91 points in midday trading.

- AFP

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