White House Open to a Short-Term Increase in Debt Limit

Obama Congress (FILE -This July 28, 2011, file photo shows the dome of the U.S. Capitol in Washington. During his weekly radio a
AP
By DONNA CASSATA

WASHINGTON -- Senate Democrats intend to introduce legislation by midweek to raise the nation's debt limit without the type of unrelated conditions Republicans have said they intend to seek, officials said Monday, as the White House signaled it would accept even a brief extension in borrowing authority to prevent an unprecedented default.
The emerging measure is designed to assure no repetition of the current borrowing squeeze until after the 2014 elections.

Depending on the Republican response, it could be the middle of next week before a final vote is taken on the measure, close to the Oct. 17 deadline that Treasury Secretary Jacob Lew has set for Congress to avert a possible default.

The details were described by officials who spoke on condition of anonymity, saying they were not authorized to discuss a measure that has yet to be made public.

It is unclear when Republicans in the House, who hold a majority, intend to advance debt limit legislation of their own.

Republicans have said they will seek long-term deficit cuts or reforms to benefit programs and perhaps a wholesale rollback in environmental rules as the price for raising the current $16.7 trillion debt limit. President Barack Obama has ruled out negotiations on the measure, although he has said he is willing to discuss fiscal and other issues with the GOP once the weeklong partial government shutdown is over and the Treasury is free to borrow again.

Gene Sperling, a senior Obama economic adviser, was pressed on whether he would rule out a two- or three-week extension on increasing the nation's $16.7 trillion debt limit. Treasury Secretary Jack Lew has warned that on Oct. 17, he exhausts the bookkeeping maneuvers he has been using to keep borrowing.

"There's no question that the longer the debt limit is extended, the greater economic certainty there will be in our economy which would be better for jobs, growth and investment," Sperling told a breakfast sponsored by the newspaper Politico. "That said, it is the responsibility of Congress to decide how long and how often they want to vote on doing that."

Economists say a default could trigger a financial crisis and recession that would echo 2008 - or worse. The 2008 financial crisis plunged the country into the worst recession since the Great Depression of the 1930s.

Sperling reiterated Obama's vow not to negotiate on the debt because it would sanction the threat of default as a bargaining chip and increase the chance of default in the future.

Seeking to maintain pressure on Republicans, Obama made a previously unannounced visit to the Federal Emergency Management Agency headquarters Monday to draw attention to a government agency that has had to furlough 86 percent of its workforce as part of the partial shutdown.

Obama thanked FEMA employees for their work preparing for Tropical Storm Karen, which dissipated Sunday after posing a threat to the Gulf Coast.

"We dodged a bullet there," Obama said.

FEMA recalled 200 furloughed workers last week to help prepare for the storm. Obama said that now that the storm has weakened, at least 100 of those workers will have to return to furloughed status.
"That's no way of doing business," the president said.

The Republican-controlled House last week passed legislation that would continue to direct money to FEMA during the shutdown. But Democrats and the White House say they do not want to respond to the impasse in a piecemeal fashion.

A defiant House Speaker John Boehner has insisted that Obama must negotiate on changes to the 3-year-old health care law and spending cuts if he wants to end the shutdown and avert a default.

"We're not going to pass a clean debt limit increase," the Ohio Republican said in a television interview Sunday. "I told the president, there's no way we're going to pass one. The votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us."

The uncompromising talk rattled financial markets early Monday as stocks slumped. China, which holds $1.277 trillion in U.S. Treasury bonds and stands as the United States' biggest foreign creditor, urged that all efforts are made to avoid a default.

Among congressional leaders, however, animosity marked the stalemate and resolution seemed elusive.

A statement from Senate Majority Leader Harry Reid, D-Nev., accused Boehner of a credibility problem and called on him to allow a vote on a straightforward bill to re-open the government.

"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," said Adam Jentleson, a spokesman for Reid. "Americans across the country are suffering because Speaker Boehner refuses to come to grips with reality."

In response, Michael Steel, a spokesman for Boehner, said it was "time for Senate Democrats to stow their faux outrage and deal with the problems at hand. The federal government is shut down because Democrats refuse to negotiate, and the debt limit is right around the corner."

Boehner said Sunday that he lacks the votes "to pass a clean CR," or continuing resolution, a reference to the temporary spending bill without conditions that would keep the government operating.

Lew has warned that the budget brinkmanship was "playing with fire" and implored Congress to pass legislation to re-open the government and increase the nation's debt limit.

The shutdown has pushed hundreds of thousands of workers off the job, closed national parks and museums and stopped an array of government services.

The one bright spot on Monday is a significant chunk of the furloughed federal workforce is headed back to work. Defense Secretary Chuck Hagel ordered nearly 350,000 back on the job, basing his decision on a Pentagon interpretation of a law called the Pay Our Military Act.

Democrats insist that Republicans could easily open the government if Boehner simply allows a vote on the emergency spending bill. Democrats argue that their 200 members in the House plus close to two dozen pragmatic Republicans would back a so-called clean bill, but the Speaker remains hamstrung by his tea party-strong GOP caucus.

"Let me issue him a friendly challenge. Put it on the floor Monday or Tuesday. I would bet there are the votes to pass it," said Sen. Chuck Schumer, D-N.Y.

In a series of Sunday television appearances, Lew said that while Treasury expects to have $30 billion of cash on hand on Oct. 17, that money will be quickly exhausted in paying incoming bills given that the government's payments can run up to $60 billion on a single day.

Treasury issued a report on Thursday detailing in stark terms what could happen if the government actually defaulted on its obligations to service the national debt, with credit markets frozen, the dollar in free fall and U.S. interest rates skyrocketing.

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teapotparty11

SCREEN NAME POLICE IN THE HOUSE!

democracks.02
Quick screen name change there badsomeyjrmac.

SIMP!

October 08 2013 at 9:20 PM Report abuse rate up rate down Reply
teapotparty11

UNEMPLOYMENT POLICE IN THE HOUSE!!!

democracks.02
Did you get a job yet?

October 08 2013 at 9:19 PM Report abuse rate up rate down Reply
Adele

http://www.newsmax.com/Newsfront/maine-gop-senator-snowe/2013/10/02/id/528939?ns_mail_uid=5169864&ns_mail_job=1540010_10022013&promo_code=150F3-1

Former Sen. Olympia Snowe of Maine says the Republican Party has bowed to extreme elements, making it unrecognizable from the GOP she joined years ago.

"Obviously it’s moved to the extremes. I wouldn’t characterize everybody within the tea party movement, but certainly there are broad elements within the party now that are driving their own agenda for their own advantage, irrespective of what implications it has for the Republican Party," Snowe told Ashleigh Banfield on CNN Newsroom.

"And certainly, this isn’t a party that I recognize and the party that I joined when I first enrolled, and that’s regrettable."

Snowe, named one of America's Best Senators by Time Magazine, in 2006, is thought of as one of the leading moderates with the Republican Party. She retired from the Senate last year.

October 08 2013 at 1:31 PM Report abuse +1 rate up rate down Reply
toosmart4u

Yup, we are in deep debt. But lets not forget where this all started, yes, with bush jr. 2 wars that we did not need too. Now if boehner would quit lying to us Americans, he has a clear cut passage of the bill if he would bring it to a vote. The moderate republicans and democrats can work together and have said so. Boehner will not bring the bill to a vote for the tea party is in his pocket.

October 08 2013 at 6:58 AM Report abuse rate up rate down Reply
KKPWW

Tell the White House to Pack Sand. We are tired of his crap.

October 08 2013 at 3:40 AM Report abuse -1 rate up rate down Reply
acesltduk

The fact remains america is sitting on a mountain of debt that it can never pay off while still wanting to play the big manon campus .

Sadly if America was an individual with every credit card maxed out who is ocassionaly was late on a car payment there is no way in hell we would lend to that individual to buy a home.

It was corrupt banking practices doing just such thing for the last 15 years that got us where we are today.

If the US was an individual and sound financial advisor would be telling her to get a job at hooters suck down any pride she has left and file for bankruptcy.

October 08 2013 at 3:36 AM Report abuse rate up rate down Reply
chapython

Reid has done the same thing in the senate. There have been bills the House passed these past years that he would not allow the senate to vote on unless a mojority of the democrats would vote for it.

Boehner has said and I think under the house rules, majority of the majority part must pass a bill for it to come up to the floor.

What we are simply seeing here is a party that is trying to make gains for their party rather than do what is right. This pertains to both parties.

October 07 2013 at 11:46 PM Report abuse +1 rate up rate down Reply
slarsit

Who benefits from the changes the republicans want in enviromental rules? Could it be the industries who see the changse as allowing them to increase their profits? How can anyone not see who the Republicans really represent? The Republicans get their elections bankrolled by the banks, corporations, wall street and the rich and powerful. They get paid to make the 10% happy.

October 07 2013 at 9:37 PM Report abuse +1 rate up rate down Reply
Brucie

That short term thing will soon be over and no one's able ro resolve the next big day?

October 07 2013 at 8:52 PM Report abuse rate up rate down Reply
joejoegolfn

Raise the debt ceiling to an even 17 trillion and use the time to balance the budget. Cut out the Dept of Energy, Education, Agriculture, Commerce and EPA. Send them back to the states where they belong. Cut government across the board 20 percent and keep spending at those levels until long term reforms are done. Pass the "Fair Tax" Slowly raise retirement age to 69, means test SS. Everyone who makes 100 k or more cut payment 10 percent. Do not tax SS but no cost of living raise. Same with all retirements. We should be out of debt in 25 years. One last thing. Never Ever elect a liberal progressive democrat or republican to the presidency or majority of either the house or the senate. That is how we got to this stage in the first place. Justify all spending by the constitution

October 07 2013 at 8:24 PM Report abuse rate up rate down Reply