US still in fiscal deadlock, but glimmers of hope arise

WASHINGTON - Reuters

Obama said he is open to negotiations over his healthcare law, but only after Congress approves measures to end a week-long government shutdown. AFP photo

A few faint glimmers of hope surfaced on late Monday in the U.S. fiscal standoff, both in Congress and at the White House, with President Barack Obama saying he would accept a short-term increase in the nation’s borrowing authority to avoid a default.

Separately, a Senate aide said Republican Senator Rob Portman, an Ohioan influential on budget issues, was floating a plan to cut federal spending and reform the U.S. tax code as part of a broader deal to reopen shuttered government agencies and raise the government’s debt ceiling.

While Portman’s initiative may or may not gain traction, most lawmakers believe that a budget deal like it will be necessary to end the stalemate.

Still, seven days into a government shutdown and only 10 days from a critical need to raise the nation’s debt limit, nothing amounting to a breakthrough was in sight.

Senate Democrats could introduce a bill to raise the debt limit this week, according to a Democratic aide. Considering the procedural roadblocks the measure could face, aides said they have to get the legislation rolling well before Oct. 17, when Treasury Secretary Jack Lew has said the government will run out of borrowing authority.

It was uncertain whether Democrats can muster the 60 votes they would need to push a debt ceiling bill, with no strings attached, through the Senate. The measure would likely run into opposition from Senate Republicans such as Texas Senator Ted Cruz, who has been leading the drive to make delaying Obama’s healthcare law a condition for raising the debt ceiling.

Democrats, and Obama, stepped up their criticism of House of Representatives Speaker John Boehner for refusing to schedule a vote on a separate unencumbered measure to fund the government and end the shutdown. They believe it would pass with most Democrats in the House voting for it along with a handful of Republicans.

Boehner said Sunday that it would fail. Later on Monday, the House passed another of its targeted funding bills, this time to reopen the Food and Drug Administration, with 20 Democrats joining 215 Republicans. The Democratic-led Senate has rejected this approach, calling for re-opening the entire government.

Obama said he is open to negotiations over his healthcare law, a slight change of tone, but only after Congress approves measures to end a week-long government shutdown and raise the U.S. debt ceiling.

Obama open to negotiate

“As soon as that happens I am eager and ready to negotiate with Republicans on a whole range of issues: how do we create more jobs, how do we build the economy, how do we boost manufacturing,” said Obama, in a visit to the Federal Emergency Management Agency on Monday to spotlight the loss of government services because of the shutdown.

“I’m happy to talk about healthcare. I’m happy to talk about energy policy, how do we deal with our long-term fiscal situation,” he said.

Obama has been particularly resistant to any tampering with his healthcare law, which has experienced a series of problems in the initial rollout. Any negotiations over it would be aimed at tinkering with it to improve it, not gut funding for it as Republicans want, White House aides have said.

Conservative Republicans in the House of Representatives have resisted funding the government for the current fiscal year until they extract concessions from Obama that would delay or defund his signature healthcare law. Many conservative Republicans, particularly in the House, want a similar condition placed on raising the debt ceiling, as well as measures aimed at cutting deficits. They also play down the impact of failing to raise the debt limit, arguing the government could prioritize payments to cover bond interest and Social Security retirement payments.

Republicans would get the strict across-the-board spending cuts that currently are in place, which many liberal Democrats, and some more centrist Republicans, want to scrap.

The three main credit rating agencies have all warned that the United States rating could be cut should it hit an expected Oct. 17 deadline when Washington is set to run out of cash, endangering its ability to pay its debt.

The Pentagon said over the weeken that it would recall around 350,000 of its furloughed civilian workers. The rest of the 800,000 or so federal employees idled by the shutdown faced another week off the job.