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October 06, 2013

US Government Shutdown Continues with No Clear End in Sight

by Michael Bowman

With Washington mired in a partial government shutdown, Congress’ top Republican is weighing in on another fiscal battle: raising America’s borrowing limit.  The speaker of the House of Representatives is insisting on negotiations to avert a U.S. debt default, but ruling out in advance a deal that would include a key priority sought by President Barack Obama and congressional Democrats.
 
America’s fiscal impasse is about to become far more grave and consequential. While a halt in federal operations has limited effects mostly felt in the United States, an inability to service the nation’s multi-trillion-dollar debt would send financial shockwaves across the globe. 
 
The federal government will reach its borrowing limit next week.  Unless Congress raises the debt ceiling, the nation will face a debt default and a near-certain credit downgrade.
 
Sunday, House Speaker John Boehner rejected a simple debt ceiling vote, just as he has rejected a condition free House vote to reopen the federal government. “There is no way we are going to pass one.  The votes are not in the House to pass a clean debt limit.  We are not going down that path," he said. 
 
Speaking on ABC's This Week program, the Ohio Republican repeatedly stressed he does not want a debt default.  But Boehner said one may well occur absent negotiations between Republicans and Democrats.
 
“It is the path we are on.  I am ready for a conversation.  I will take anybody on the Democrat side who wants to seriously sit down and begin to work out this problem," he said. 
 
President Obama and congressional Democrats say they would welcome discussions, but not under threat of a continued government shutdown or an economic meltdown.  They say talks on a broad range of issues can begin once federal operations resume and the borrowing limit is raised.
 
Democratic Senator Charles Schumer also appeared on ABC. “We want to negotiate without a gun to our head.  If you go for [tolerate] this kind of hostage-taking once, it comes back worse and worse and worse," he said. 
 
Republicans say conditions free votes to fund the government and hike the debt ceiling would constitute a surrender of their leverage over America’s fiscal destiny.
 
If negotiations did take place, the two parties differ sharply on desired outcomes.  Republicans want to weaken President Obama’s signature health care law and to shrink the size of government.  Democrats defend the health care law and want additional tax revenue as part of a formula for improving the nation’s fiscal health.
 
But while insisting on negotiations, Speaker Boehner is already ruling out a primary Democratic objective as part of any deal that could emerge. “Very simple: we are not raising taxes," he said. 
 
The speaker noted that additional revenues are already being collected on America’s top earners as part of a deal reached at the end of last year.
 
On one point, both parties agree: the government shutdown battle is merging with the fight over the debt ceiling.  A path to resolve either has yet to materialize.