WASHINGTON – President Barack Obama and House Speaker John Boehner offered hints of possible compromise but also traded heated rhetoric Tuesday, a frustratingly inconclusive combination that left the eight-day partial government shutdown firmly in place and the threat of an unprecedented national default drawing closer.
“There’s a crack there,” Boehner said of the impasse near the end of a day of maneuvering at the White House and the Capitol. Yet the Ohio Republican added that it was not enough to warrant optimism.
Stocks fell significantly – the Dow Jones average by 159 points – as political gridlock endured. And, in the latest in a string of dire warnings, the International Monetary Fund said failure to raise America’s debt limit could lead to default and disrupt worldwide financial markets, raise interest rates and push the U.S. economy back into recession.
Republicans “don’t get to demand ransom in exchange for doing their jobs,” Obama said at the White House. “They don’t also get to say, you know, unless you give me what the voters rejected in the last election, I’m going to cause a recession.”
In Congress, a plan by Senate Democrats to raise the debt limit by $1 trillion to stave off a possible default drew little evidence of support from Republicans.
And a proposal by Republicans to create a working group of 20 lawmakers to tackle deficit issues, approved 224-197 by the House, drew a veto threat from the White House, the latest in a string of them as the administration insists the GOP reopen the government and avert default before any negotiations on deficit reduction or the 3-year-old health care law can take place.
On a day in which both Obama and Boehner appeared on live television, both men appeared to be giving ground yet yielding little if anything of substance.
At midmorning, Boehner and other Republicans seemed to soften their demands.
“I suspect we can work out a mechanism to raise the debt ceiling while a negotiation is underway,” said Rep. Tom Cole, an Oklahoma Republican who is close to Boehner.
The speaker, who had previously insisted on specific changes in the health care law as the price for preventing the shutdown, told reporters, “I want to have a conversation (with Obama and Democrats). I’m not drawing any lines in the sand. It’s time for us to just sit down and resolve our differences.”
Asked if he was willing to raise the debt ceiling and fund the government for a short period, the Ohio Republican sidestepped. “I’m not going to get into a whole lot of speculation,” he said.
A few hours later, Obama told a news conference he was willing to negotiate with Republicans on budget and other issues if Congress passed even short-term legislation to end the crisis.
“I’ll even spring for dinner again,” he said, referring to his courtship of Republican senators last winter, and attempting to inject humor into a political impasse where invective has been the norm.
Ninety minutes later, Boehner was unsmiling.
“What the president said today was if there’s unconditional surrender by Republicans, he’ll sit down and talk,” he said. Renewing his call for “a conversation” about key issues facing the country, the Ohio Republican said, “Not next week. Not next month. The conversation ought to start today.”
Privately, officials said deeply suspicious Republicans were attempting to gauge Obama’s comments to see whether they might represent a concession.
Treasury Secretary Jacob Lew has said the deadline for Congress to act is Oct. 17, setting that as the day the government will exhaust its ability to borrow funds and will have to rely day to day on tax and other receipts to pay its bills.
Some Republicans have downplayed the significance of the Oct. 17 deadline, saying that even then, the United States would be able to pay China and other holders of U.S. debt and avoid widespread economic dislocation.
But Obama said they were badly misguided, warning that default would harm the economy, cause retirement accounts to shrivel and houses to lose value. Still other Republicans have made it clear in recent days they agree with the threat posed by default and are determined to prevent it.
In the back-and-forth, the threat of a default overshadowed the continuing partial government shutdown. An estimated 450,000 federal workers are idled at agencies responsible for items as diverse as food inspection and national parks.
The House approved legislation during the day to pay for a resumption of Head Start, the preschool program for disadvantaged children. The vote was 248-168. The bill was the latest in a string of measures to end the shutdown in one corner of government or another in hopes of forcing Democrats to abandon their own demands for a full reopening of the federal establishment.
The House also voted 420-0 to make sure federal workers on the job don’t miss their next regularly scheduled paycheck on Oct. 15.
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