President Barack Obama speaks about the the budget and the partial government shutdown, Tuesday, Oct. 8, 2013, in the Brady Press Room of the White House in Washington. The president said he told House Speaker John Boehner he's willing to negotiate with Republicans on their priorities, but not under the threat of "economic chaos." Charles Dharapak/Associated Press
President Barack Obama stepped up pressure Tuesday on the top House Republican to hold votes to reopen the federal government and prevent a potentially disastrous U.S. government default.
Obama spoke to reporters at the White House a few hours after calling House Speaker John Boehner and urging him to drop demands that the votes be tied to Republican demands for dismantling Obama's health care law and cutting federal spending.
Obama said he's willing to negotiate with Republicans on their priorities, but not under the threat of "economic chaos."
The U.S. government has been partially shut for eight days because of Congress' failure to pass a normally routine temporary spending bill. Obama also wants Congress to extend the government's borrowing authority, warning that if it fails to do so by Oct. 17, the United States will not be able to pay its bills.
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Boehner said Obama is demanding that the Republicans surrender the budget and debt limit fight unconditionally, and he insisted that the two sides start negotiating now on the terms of any budget or debt agreement, saying attaching other measures is a long-held practice.
"What the president said today was if there's unconditional surrender by Republicans, he'll sit down and talk," he said. Boehner called for "a conversation" about key issues facing the country: "Not next week. Not next month. The conversation ought to start today."
Although nothing concrete has been offered, House Republicans did float broad hints Tuesday that they might be willing to pass short-term legislation to reopen the government and avert the default in exchange for immediate talks with the Obama administration on reducing deficits and changing the three-year-old health care law.
At the White House a few hours later, President Barack Obama said he was "absolutely willing" to hold talks on those terms.
"If reasonable Republicans want to talk about any of these things again, I'm ready to head up to the Hill and try," he said.
Democrats in the Senate planned to unveil a measure as early as Tuesday that was expected to permit $1 trillion or more in new borrowing above the current $16.7 trillion debt ceiling that the administration says will be hit on Oct. 17.
But Republicans have said they want changes to Obama's signature health care law in exchange for reopening the government. They have said they want spending cuts in exchange for raising the debt limit.
Government workers return
Meanwhile, some 350,000 civilian Defense Department workers were summoned back to work on Monday as the result of legislation Congress passed and Obama signed after the shutdown began. Other agencies, like NASA and the Environmental Protection Agency, remain mostly shuttered.
An estimated 450,000 federal workers are idled at agencies responsible for items as diverse as food inspection and national parks, although all employees are eventually expected to receive full back pay.
That left an estimated 450,000 federal employees idle at agencies responsible for domestic programs, ranging from the Departments of Education to Energy, and including Labor, Health and Human Services, Interior, Transportation and more.
The events unfolded as the stock market sank for the second day in a row on nervousness over the shutdown.The Dow Jones industrial average fell 159.71 points, or 1.1 per cent, to close at 14,776.53. The S&P 500 declined 20.67 points, or 1.2 per cent, to 1,655.45. The Nasdaq composite dropped 75.54 points, or two per cent, to 3,694.83.
And in the latest in a string of dire global warnings, the International Monetary Fund said failure to raise America's $16.7 trillion borrowing limit later this month could lead to a government default that might disrupt worldwide financial markets, raise interest rates and push the U.S economy back into recession.
Treasury Secretary Jacob Lew has said that on Oct., 17, the government will exhaust its ability to borrow funds and will have to rely day-to-day on tax and other receipts to pay its bills.
Some Republicans have downplayed the significance of the deadline, saying that even then, the United States would be able to pay China and other holders of U.S. debt.
But Obama said they were badly misguided, warning that default would harm the economy, cause retirement accounts to shrivel and houses to lose value.
Other Republicans have made it clear in recent days they agree with the threat posed by default and are determined to prevent it.
"I suspect we can work out a mechanism to raise the debt ceiling while a negotiation is under way," said Representative Tom Cole, who is close to Speaker John Boehner.
The shutdown began more than a week ago after Obama and Senate Democrats rejected Republican demands to defund "Obamacare," then to delay it, and finally to force a one-year delay in the requirement for individuals to purchase health care coverage or face a financial penalty.
It was not a course Boehner and the leadership had recommended — preferring a less confrontational approach and hoping to defer a showdown for the debt limit. Their hand was forced by a strategy advanced by Texas Senator Ted Cruz and conservative Tea Party-aligned House members determined to eradicate the health care law before it fully took root.
Yes majority would mean many schools would open Monday. Results expected 9:30 p.m. PT today
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