News / USA

White House Willing to Consider Short-Term Debt Ceiling Deal

FILE - Gene Sperling, Director of the National Economic Council, speaks about President Barack Obama and his negotiations with Congress regarding the budget at the 2013 Fiscal Summit in Washington.
FILE - Gene Sperling, Director of the National Economic Council, speaks about President Barack Obama and his negotiations with Congress regarding the budget at the 2013 Fiscal Summit in Washington.
VOA News
The White House on Monday reiterated that President Barack Obama would not negotiate with Republicans over the threat of a debt default, sticking to its line as stock prices fell and a U.S. government shutdown moved into its second week.
 
But White House National Economic Council Director Gene Sperling did not rule out a short-term increase to the borrowing cap, such as two or three weeks, which could offer more time for an agreement. Speaking at a Politico breakfast, he said that while the administration prefers an increase that would last as long as possible, the length of the increase is Congress's decision.
 
“The longer the debt limit is extended, the greater the certainty for our economy,” Sperling said. “That said, it is the responsibility of Congress to decide how long and how often they want to vote on doing that.”
 
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 of conservative Republicans want a similar condition placed on raising the debt ceiling, as well as measures aimed at cutting deficits.
 
Republican House Speaker John Boehner vowed on Sunday not to raise the U.S. debt ceiling without a “serious conversation” about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default.
 
The last big confrontation over the debt ceiling, in August 2011, ended with an 11th-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if there was a default. A similar last-minute resolution remains a distinct possibility this time.
 
Equities investors were unnerved by the apparent hardening of stances over the weekend, with European shares falling to a four-month low on Monday and U.S. stocks trading lower.
 
In comments on Sunday television political talk shows, neither Republicans nor Democrats offered any sign of impending agreement on either the shutdown or the debt ceiling, and both blamed the other side for the impasse.
 
House Speaker John Boehner, R-Ohio, speaks to reporters following a meeting with President Barack Obama at the White House, Oct. 2, 2013.House Speaker John Boehner, R-Ohio, speaks to reporters following a meeting with President Barack Obama at the White House, Oct. 2, 2013.
x
House Speaker John Boehner, R-Ohio, speaks to reporters following a meeting with President Barack Obama at the White House, Oct. 2, 2013.
House Speaker John Boehner, R-Ohio, speaks to reporters following a meeting with President Barack Obama at the White House, Oct. 2, 2013.
“I'm willing to sit down and have a conversation with the president,” Boehner said on ABC's This Week. But, he added, Obama's “refusal to negotiate is putting our country at risk.”
 
In his list of demands for raising the debt ceiling, Boehner did not mention the Affordable Care Act, commonly known as Obamacare, but rather focused on the debt.
 
“It's time to talk about the spending problem,” said Boehner, including measures to rein in costs of entitlement programs such as the Social Security retirement system and Medicare, the government-run health insurance program for seniors.
 
Democratic Senator Charles Schumer, whose constituency includes Wall Street and New York's financial hub, on Monday said Boehner would be forced to act as the deadline for the nation's debt ceiling gets closer, calling it “too dangerous” to not raise the U.S. debt limit and saying any default could lead to an economic “recession, depression or worse.”
 
From left, Senate Majority Leader Harry Reid of Nev., Sen. Charles Schumer, D-N.Y., and Senate Budget Committee Chair Sen. Patty Murray, D-Wash., announce that President Barack Obama has invited the top leaders in Congress to meet with him at the White HoFrom left, Senate Majority Leader Harry Reid of Nev., Sen. Charles Schumer, D-N.Y., and Senate Budget Committee Chair Sen. Patty Murray, D-Wash., announce that President Barack Obama has invited the top leaders in Congress to meet with him at the White Ho
x
From left, Senate Majority Leader Harry Reid of Nev., Sen. Charles Schumer, D-N.Y., and Senate Budget Committee Chair Sen. Patty Murray, D-Wash., announce that President Barack Obama has invited the top leaders in Congress to meet with him at the White Ho
From left, Senate Majority Leader Harry Reid of Nev., Sen. Charles Schumer, D-N.Y., and Senate Budget Committee Chair Sen. Patty Murray, D-Wash., announce that President Barack Obama has invited the top leaders in Congress to meet with him at the White Ho
“The economy could collapse. Will it? No one's certain, but there's a high enough chance that no one - no one - should risk it,” Schumer told CNN's New Day.
 
China, the biggest foreign holder of U.S. Treasuries, urged Washington to take decisive steps to avoid a crisis and ensure the safety of Chinese investments.
 
“The United States is totally clear about China's concerns,” Vice Finance Minister Zhu Guangyao said in the Chinese government's first public comment on the Oct. 17 deadline.
 
“We hope the United States fully understands the lessons of history,” Zhu told reporters in Beijing, referring to the downgrade of the U.S. credit rating by Standard & Poor's in 2011.
 
The two issues of the Federal government shutdown and the debt ceiling started out separately in the House but have been merged by the pressure of time.
 
Harry Reid, leader of the Democratic-led Senate, is expected to decide soon on whether to try to open formal debate on a “clean” bill, without extraneous issues attached, to raise the U.S. Treasury's borrowing authority.
 
Passage of such a measure would require at least six of the Senate's 46 Republicans to join its 54 Democrats in order to overcome potential procedural hurdles that opponents of Obamacare could erect.
 
According to one Senate Democratic aide, the debt limit hike might be coupled with an initiative to reform the U.S. tax code and achieve long-term savings in Social Security and Medicare, whose expenses have soared along with the population of retirees.
 
Republican lawmakers have floated other ideas, such as a very short debt limit increase, which would create time for more negotiations at the expense of further market uncertainty, and repeal of a medical device tax.
 
The tax is expected to generate some $30 billion over 10 years to help pay for health care insurance subsidies under Obamacare.
 
Some Democrats favor repealing the tax, but they insist that replacement revenues be found and repeal be considered only after the government reopens and the debt limit is raised.
 
Major problems in House
 
Agreement in the Senate would send the tangle of issues back into the House, where the Republican caucus has adopted a hard line on both Obamacare and the debt ceiling.
 
There may be enough support in the House to pass a clean spending bill, according to some analysts. That would require almost all of the House's 200 Democrats and about 20 of its 232 Republicans to vote in favor. But taking such a vote would require Boehner to violate his policy against bringing a vote on any legislation favored by less than a majority of House Republicans.
 
Reid's spokesman Adam Jentleson issued a statement on Monday attacking what he called “Boehner's credibility problem,” including the speaker's assertion that there are not enough votes in the House to pass a clean bill.
 
“There is now a consistent pattern of Speaker Boehner saying things that fly in the face of the facts or stand at odds with his past actions,” Jentleson said. “Americans across the country are suffering because Speaker Boehner refuses to come to grips with reality.”
 
The Pentagon said over the weekend 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.
 
For the moment, neither side is moving toward accommodation, and the stakes rise with the passage of time.
 
For any deal to work, negotiators probably would have to choreograph a multipronged approach that allows all sides to declare victory, even if it is one that sets up another battle in mid-November or December.
 
While the shutdown so far has not caused major disruption in the markets, a fight over the debt ceiling could. From July 31 thru Aug. 2 during the debt-limit standoff in 2011, the S&P 500 index lost 3 percent, and the deadlock led to a downgrade of the U.S. credit rating to AA-plus from AAA by S&P.
 
The outlooks from Moody's and S&P, the only agency so far to have lowered its rating on U.S. debt, are both at “stable,” but Fitch Ratings has indicated a negative outlook for the U.S. debt rating.
 
All three agencies have said the U.S. debt profile has improved substantially over the past two years, with gross domestic product growth, while slow, proving to be persistently positive and the budget deficit trending lower.
 
Fitch said in a note last week that the U.S. rating is at risk in the current showdown over the debt ceiling because failure to raise it sufficiently in advance of the deadline raises questions about the full faith and credit of the United States to honor its obligations.
 
Political gridlock remains the greatest risk to the U.S. outlook, Fitch said in the note on Oct. 1, the first day of the partial government shutdown.
 
“This 'faith' is a key underpinning of the U.S. dollar's global reserve currency status and reason why the US 'AAA' rating can tolerate a substantially higher level of public debt than other 'AAA' sovereigns,” Fitch said.

You May Like

Australia-Cambodia Resettlement Agreement Raises Concerns

Agreement calls for Cambodia to accept refugees in return for $35 million in aid and reflects Australia’s harder line approach towards asylum seekers and refugees More

India Looks to Become Arms Supplier Instead of Buyer

US hopes India can become alternative to China for countries looking to buy weapons, but experts question growth potential of Indian arms industry More

Earth Day Concert, Rally in Washington

President Obama also took up the issue Saturday in his weekly address, saying there 'no greater threat to our planet than climate change' More

This forum has been closed.
Comment Sorting
Comments
     
by: Godwin from: Nigeria
October 07, 2013 3:20 PM
Question is, why premise a country's economy on debt and borrowing? What happened to Obama's campaign promise of a curb on deficit and spending? Is it a case of another red line tripped over? And why are the US media laying all the blame on the Republicans while the president remains intransigent in his oars? Imagine a world of pro-Obama media in the USA! Tell me something else, if the president was sympathetic toward the 800,000 workers that will remain out of earnings for another week, he would have made a move that shows he has the interest of everyone at heart, not just a few, not for ego. But it is worse to think of the mighty USA as thriving on loan - borrowed economy - and cannot move forward if it has no lenders to bail it out at every inch of its progression. imagine a world where USA must borrow from China, Russia or Iran to feed its populace!

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Are Energy Needs Putting Thailand's Natural Beauty at Risk?i
X
Steve Sandford
April 17, 2015 12:50 AM
Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Overwhelmed by Migrants, Italy Mulls Military Action to Stabilize Libya

Thousands more migrants have arrived on the southern shores of Italy from North Africa in the past two days. Authorities say they expect the total number of arrivals this year to far exceed previous levels, and the government has said military action in Libya might be necessary to stem the flow. VOA's Henry Ridgwell reports.
Video

Video Putin Accuses Kyiv of ‘Cutting Off’ Eastern Ukraine

Russian President Vladimir Putin, in his annual televised call-in program, again denied there were any Russian troops fighting in Ukraine. He also said the West was trying to ‘contain’ Russia with sanctions. Henry Ridgwell reports on reactions to the president’s four-hour TV appearance.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Xenophobic Violence Sweeps South Africa

South Africa, long a haven for African immigrants, has been experiencing the worst xenophobic violence in years, with at least five people killed and hundreds displaced in recent weeks. From Johannesburg, VOA’s Anita Powell brings us this report.
Video

Video Sierra Leone President Koroma Bemoans Ebola Impact on Economy

In an interview with VOA's Shaka Ssali on Wednesday, President Ernest Koroma said the outbreak undermined his government’s efforts to boost and restructure the economy after years of civil war.
Video

Video Protester Lands Gyrocopter on Capitol Lawn

A 61-year-old mailman from Florida landed a small aircraft on the Capitol lawn in Washington to bring attention to campaign finance reform and what he says is government corruption. Wednesday's incident was one in a string of security breaches on U.S. government property. Zlatica Hoke reports the gyrocopter landing violated a no-fly zone.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Badly Burned Ukrainian Boy Bravely Fights Back

A 9-year-old Ukrainian boy has returned to his native country after intensive treatment in the United States for life-threatening burns. Volodia Bubela, burned in a house fire almost a year ago, battled back at a Boston hospital, impressing doctors with his bravery. Faith Lapidus narrates this report from VOA's Tetiana Kharchenko.
Video

Video US Maternity Leave Benefits Much Less Than Many Countries

It was almost 20 years ago that representatives of 189 countries met at a UN conference in Beijing and adopted a plan of action to achieve gender equality around the world. Now, two decades later, the University of California Los Angeles World Policy Analysis Center has issued a report examining what the Beijing Platform for Action has achieved. From Los Angeles, Elizabeth Lee has more.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.
Video

Video Sidemen to Famous Blues Artists Record Their Own CD

Legendary blues singer BB King was briefly hospitalized last week and the 87-year-old “King of the Blues” may not be touring much anymore. But some of the musicians who have played with him and other blues legends have now released their own CD in an attempt to pass the torch to younger fans... and put their own talents out front as well. VOA’s Greg Flakus has followed this project over the past year and filed this report from Houston.
Video

Video Iran-Saudi Rivalry Is Stoking Conflict in Yemen

Iran has proposed a peace plan to end the conflict in Yemen, but the idea has received little support from regional rivals like Saudi Arabia. They accuse Tehran of backing the Houthi rebels, who have forced Yemen’s president to flee to Riyadh, and have taken over swaths of Yemen. As Henry Ridgwell reports for VOA, analysts say the conflict is being fueled by the Sunni-Shia rivalry between the two regional powers.

VOA Blogs