GOP weighs short-term debt limit hike

US House Republican leaders are considering a short-term increase in the US debt limit as a possible way to break out of the gridlock that threatens the nation with an unprecedented default in as little as a week, officials said.

There now is far less urgency on Capitol Hill about ending the government shutdown, which heads into its 10th day on Thursday (local time). It has caused inconvenience and financial concern for many individual Americans but appears not to threaten the widespread economic damage a default might bring.

The officials declined to say what conditions, if any, might be attached to legislation to raise the $16.7 trillion debt limit for an undetermined period, perhaps a few weeks or months. The GOP rank and file are expected to meet and discuss the issue on Thursday, before a delegation led by Speaker John Boehner goes to the White House to meet with President Barack Obama.

Obama has said he won't agree to sign a debt limit increase if conditions are attached. Republicans are demanding as yet-unspecified concessions to reduce deficits or make changes in the nation's three-year-old health care law.

At the same time, the House has voted to create a 20-member group of lawmakers from the House and Senate to negotiate over those and other issues - a bill that made no mention of the debt limit.

The officials describing the developments late Wednesday spoke only on condition of anonymity, saying they were not authorised to disclose details of private deliberations.

The disclosure came as Obama met at the White House in late afternoon for more than an hour with House Democrats. He told them that while he would prefer legislation extending the Treasury's borrowing ability beyond the next election, he would also sign a shorter-term bill.

In addition to leadership conversations, a group of House conservatives met privately during the day for what several officials described as a wide-ranging discussion on the debt limit and the threat - or lack of it - posed by default.

No consensus was reached, but among those who spoke was Rep. Paul Ryan, R-Wis., the 2012 GOP vice presidential candidate who is chairman of the House Budget Committee and a prominent deficit hawk. In an op-ed article published during the day in The Wall Street Journal, he wrote, "We need to pay our bills today-and make sure we can pay our bills tomorrow. So let's negotiate an agreement to make modest reforms to entitlement programs and the tax code."

Raising the cost of Medicare for better-off beneficiaries and making changes to the tax code are perennials in budget negotiations, and precisely the type of item Obama says he is willing to discuss - but only after the government is open and the debt limit raised.

The private conversations stood in contrast to political manoeuvring that characterized the day at the Capitol.

Its approval ratings scraping bottom, Congress took no discernible steps to end the nine-day partial government shutdown or to head off threatened default.

Instead, the House passed legislation that the Obama administration already had rendered unnecessary - on providing death benefits to families of military forces who die - while Boehner and Democratic leader Nancy Pelosi met face-to-face - and promptly disagreed even about which side had requested the get-together.

Across the Capitol, the Senate marked time under 18th century rules, focusing its attention on a test vote - next weekend - on a $1 trillion increase in the debt limit to avert a default.

"Enough is enough," said Barry Black, the Senate chaplain who has delivered a series of pointed sermonettes in recent days as lawmakers careen from crisis to crisis.

Evidently not.

With Treasury Secretary Jacob Lew on tap to testify before lawmakers on Thursday, officials said he was expected to reiterate that Congress needed to raise the government's borrowing limit by October 17 to be sure of preventing default.

Despite warnings from leaders of both political parties that a financial default could plunge the economy into recession, cause interest rates to rise and home values to plummet, one Republican lawmaker, Rep. Mo Brooks of Ala., said a default wouldn't be the worst calamity to befall the country.

"Insolvency and bankruptcy" would be worse, he said, warning that that would be the result of yet another increase in the debt limit without attaching measures to bring down the federal budget deficit.

The nation's largest manager of money market mutual funds was taking no chances. It said it had been selling off government debt holdings over the past couple of weeks and no longer held any that would come due around the time the nation could hit its borrowing limit. Fidelity Investments expects Congress to take the necessary steps to avoid default, but "we have to take precautionary measures," said Nancy Prior, president of Fidelity's Money Market Group
The partial shutdown ground on, although an Associated Press-GfK poll suggested the impact was anything but uniform. Only 17 per cent of those polled said they or their households had experienced any impact, while 81 per cent said they had not.

Who's fault? Some 62 per cent said Republicans were mostly or entirely to blame for the partial shutdown, which began on October 1, while 49 per cent said as much for President Barack Obama.
There was widespread agreement on one point. The country is widely dissatisfied with elected lawmakers.

A new Gallup poll put approval for Congress at 11 per cent, a mere one in every nine adults. The AP-GfK survey made it 5 per cent approval - and only 3 per cent among independents, whose votes are the main prize in next fall's midterm elections. Nationally, a whopping 83 per cent of adults disapprove of Congress' actions.

Inside the Capitol, neither private meetings nor public votes offered any hint of progress toward ending the latest gridlock.

Republicans are seeking negotiations on budget, health care and other issues as the price for reopening the government and raising the debt limit. Obama and Democrats say no talks unless legislation is first passed.

The House voted 252-172 to reopen the Federal Aviation Administration. Democrats generally opposed the measure and the White House issued a veto threat, saying the government should be reopened all at once, not on a piecemeal basis.

There was a brief moment of unity when the House voted 425-0 to let the Pentagon pay death benefits to the families of fallen US troops.

That was the topic that drew Black's attention in his daily prayer at the opening of the Senate's session. "When our federal shutdown delays payments of death benefits to families of children dying in faraway battlefields, it's time for our lawmakers to say, 'Enough is enough," he said.

Controversy accompanied the subject.

Republicans said Congress had passed and Obama had signed legislation last week to permit the payments, but the Defence Department said otherwise. As Republican leaders were pushing toward a vote on the bill making it explicit, Defence Secretary Chuck Hagel announced a charity would pick up the death benefit costs instead.

In a delicate minuet, Pentagon officials said they were not permitted to solicit the funds, but could accept an offer if one were made unbidden. That eased the pressure on Senate Democrats and the White House, who have generally refused to support measures to ease the impact of the partial shutdown without ending the disruption entirely.

- AP