House Republicans to propose short-term debt ceiling plan

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WASHINGTON -- Is it a blink or a bluff?

House Republican leaders said Thursday they will propose a temporary increase in the nation's borrowing limit -- a potential first step toward breaking a political deadlock that has shut down parts of the government and now threatens a U.S. default as soon as next week.

However, the proposal outlined by House Speaker John Boehner would allow a partial government shutdown to continue while Republicans and Democrats negotiate broader budget and spending issues, as well as GOP demands to dismantle or delay Obamacare.

After meeting with his GOP caucus, Boehner described the offer as a temporary increase in the debt ceiling in exchange for Obama's "willingness to sit down and discuss with us a way forward to reopen the government and to start to deal with America's pressing problems."

The measure, which could come up for a vote as soon as Friday, would allow the government to continue borrowing money to pay its bills through mid-November.

Without such an extension, Treasury Secretary Jack Lew says the United States risked default as soon as October 17, an outcome that economists label as potentially catastrophic.

At the White House, spokesman Jay Carney said Obama was "happy that cooler heads at least seem to be prevailing in the House" over the need to avoid a possible default.

However, Obama has said that Congress must increase the debt ceiling and reopen the government -- without attaching partisan side issues to either -- before he would hold talks with Republicans trying to wring concessions on deficit reduction and his signature health care reforms detested by conservatives.

Carney indicated the president's position remained unchanged, but he repeatedly avoided directly answering when asked by reporters if both had to happen before Obama would engage in formal negotiations with Republicans on broader budget and deficit reduction issues.

"He wants Congress to fulfill both its fundamental responsibilities," Carney said of reopening the government and raising the debt ceiling. "If Congress takes action without partisan strings attached on either of those, that would be a good thing, and the president said himself that he would sign it."

When further pressed, Carney said reporters were asking him "a lot of questions on a bill that may not exist and may not ever exist."

Senate Majority Leader Harry Reid later rejected the possibility of negotiations with Republicans while the government remains closed, telling reporters: "It's not going to happen."

Wall Street soars on possible deal

Optimism in Washington triggered relief on Wall Street as the Dow Jones Industrial Average posted its biggest one-day gain of the year at more than 300 points. Investors have been nervous over the political stalemate and the possibility of a debt default and its potential economic consequences.

Boehner and other House GOP leaders went to the White House later Thurdsay to meet with Obama. The speaker tried to frame the talks as a de facto start of negotiations.

"That's a conversation we're going to have with the president today," Boehner said earlier when asked what it would take for House Republicans to agree to reopen the government. "I don't want to put anything on the table. I don't want to take anything off the table."

Senate Democrats held their own meeting with Obama on Thursday, while Senate Republicans have been invited for their own meeting on Friday morning.

On Wednesday, Obama told a separate meeting with House Democrats that he would consider a short-term deal to raise the federal borrowing limit, a Democratic lawmaker told CNN.

"If that's what Boehner needs to climb out of the tree that he's stuck in, then that's something we should look at," according to the lawmaker, who attended the meeting and spoke on the condition of anonymity.

Some congressional Democrats balked at the outline of the GOP offer, saying the government must reopen and the debt ceiling must be increased to get broader talks going.

"One way or another both of those have to happen," said veteran Democratic Sen. Carl Levin of Michigan.

Another Democrat, Rep. Elijah Cummings of Maryland, said Obama "needs to press for the opening of the government."

"Without a doubt the default would be much more catastrophic, but I've got constituents, a lot of whom work for the federal government who are going through catastrophes every hour," Cummings said.

The partial government shutdown began when Congress failed to fund the government for the new fiscal year that began October 1. The approaching debt ceiling deadline further increases pressure on Congress to resolve the impasse.

'Measure of hope'

On Wednesday, Obama warned the House Democrats that if Republicans proposed a short-term fix and Democrats rejected it, they would lose the high ground in the argument over which party was being reasonable, according to a legislator at the White House meeting.

GOP seeks leverage

Days of back-and-forth rhetoric and jibes between the leaders have brought no direct negotiations, but plenty of accusations and political spin.

On Wednesday, GOP leaders appeared to shift their focus from efforts to dismantle Obamacare, the initial driving force behind the shutdown, to securing spending cuts elsewhere.

Ryan's plan drops Obamacare

Republican Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman who was the party's vice presidential nominee last year, argued in a Wall Street Journal op-ed that Democrats and Republicans should focus on "modest reforms to entitlement programs and the tax code."

"Right now, we need to find common ground," he wrote in the column posted online Tuesday night. "We need to open the federal government. We need to pay our bills today -- and make sure we can pay our bills tomorrow. So let's negotiate an agreement to make modest reforms to entitlement programs and the tax code."

However, Ryan's column never mentioned Obamacare, focusing instead on forced spending cuts to domestic and military programs, as well as reforms to Medicare.

Ryan's Obamacare omission angered some conservatives seeking to dismantle the health care reforms, but GOP supporters of Ryan said he was signaling a strategy to separate the debt ceiling negotiations from the separate spending plan needed to end the government shutdown.

GOP Rep. James Lankford of Oklahoma told CNN on Thursday that House Republicans no longer would demand defunding Obamacare as a condition for reopening the government.

"That's currently off the table now," Lankford said in an interview on "The Lead with Jake Tapper." Instead, GOP conservatives would seek a one-year delay in penalties people would face if they failed to obtain health insurance as required by the law, he said.

Boehner insists that the government must reduce deficits, declaring that Republicans won't raise the debt ceiling without steps toward that goal.

A GOP source told CNN that Boehner may lack support from some or most of his GOP caucus, requiring Democratic votes for the proposal to pass.

Democrats planning

Democratic Sen. Dick Durbin of Illinois told CNN that his side already was mulling over "what we will discuss, what we will negotiate over, what things will be on the table."

Meanwhile, Senate Democrats announced they will propose a measure to increase the debt ceiling beyond next year's congressional elections with no additional issues attached.

While many Republicans are certain to oppose it, Democratic leaders hope increased pressure for Congress to prevent a default next week will cause some GOP senators to vote for it.

Without a breakthrough, the shutdown would continue at a cost estimated at up to $50 billion a month.

Failure to raise the debt ceiling by next week's deadline would leave the government unable to borrow money to pay its bills for the first time in its history.

All the partisan bickering -- and lack of progress -- is taking its toll not just on furloughed workers, shuttered government facilities and programs, but also on Americans' confidence in their government.

Poll: Most angry at both parties

In a national poll released Monday, most respondents said the government shutdown was causing a crisis or major problems for the country.

The CNN/ORC International survey indicated that slightly more people were angry at Republicans than Democrats or Obama for the shutdown, though both sides took a hit.

According to the poll conducted over the weekend, 63% of respondents said they were angry at Republicans for the way they have handled the shutdown, while 57% expressed anger at Democrats and 53% at Obama.

"It looks like there is more than enough blame to go around and both parties are being hurt by the shutdown," said CNN Polling Director Keating Holland.

According to a new Gallup poll on Wednesday, the Republican Party's favorable rating dropped to 28%, down 10 percentage points from September. The 43% for Democrats was a 4 percentage-point drop from last month.

A CNN survey indicates that enough Republicans in the House would join Democrats in voting for a Senate-passed spending plan to end the shutdown.

All 200 Democrats and 19 Republicans support passing a continuing resolution with no additional legislative strings attached.

With two vacancies in 435-member House, 217 votes are the minimum needed for the measure to win approval.

However, not enough Republicans are willing to join Democrats in a procedural move to force Boehner to hold a vote on the Senate plan.

Boehner has said the measure would fail to pass in the House, a contention rejected by Obama and Democrats.

The speaker has previously allowed measures to pass the House with mostly Democratic support, which has weakened his leadership among conservatives. Doing so now could cost him his leadership post due to the conservative backlash it would probably unleash, analysts say.