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

Photogallery Pistorius Sentenced, Taken to Prison

Pistorius, convicted of culpable homicide in shooting death of girlfriend Reeva Steenkamp, will likely serve about 10 months of five-year sentence, before completing it under house arrest More

UN to Aid Central Africa in Polio Vaccinations

Synchronized vaccinations will be conducted after Cameroon reports a fifth case of the wild polio virus in its territory More

WHO: Ebola Vaccine May Be in Use by Jan.

WHO assistant director Dr. Marie Paule Kieny says clinical trials of Ebola vaccines are underway or planned in Europe, US and Africa 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.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid