No progress on shutdown after Wed. night meeting at White House

Senators Harry Reid and Nancy Pelosi after White House meeting. Oct. 2, 2013. Photo: CNN

Senator Harry Reid and congresswoman Nancy Pelosi speak on Oct. 2. (Credit: CNN)

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WASHINGTON — Congressional leaders emerged from a White House meeting with President Barack Obama on Wednesday evening pointing fingers at members of their respective opposing parties for not doing their part to halt the government shutdown and address the possibility of a federal debt default.

With many other federal workers on furlough, a few still working — President Barack Obama and congressional leaders — met Wednesday, although hopes were slim they would soon overcome sharp partisan differences that have triggered a government shutdown.

The White House meeting was expected to include a briefing on the havoc of not funding the government or allowing it to pay its bills on time through new borrowing authority — a fight that will intensify later this month.

Congressional leaders emerged after an hour and indicated no progress on narrowing their differences.

Obama made clear that he won’t make concessions or engage in give-and-take negotiations with House Speaker John Boehner, whose Republican caucus demands anti-Obamacare provisions be attached to any spending plan needed to end the shutdown that began on Tuesday.

In an interview with CNBC, Obama said he was “prepared to negotiate on anything” regarding the federal budget — but only after Congress passes “a clean piece of legislation that reopens the government” and allows the “Treasury to pay for things that Congress itself already authorized.”

“Am I exasperated?” Obama said of Boehner, who is under pressure from tea party Republicans, and refusing to let the House vote on the Senate-approved spending plan. “I am absolutely exasperated, because this is entirely unnecessary.”

Boehner and other Republicans have complained that Obama and Democrats refuse to negotiate on Obamacare, which took a major step forward this week when exchanges to purchase private health coverage were rolled out.

“We’re pleased the president finally recognizes that his refusal to negotiate is indefensible,” said Brendan Buck, a spokesman for Boehner. “It’s unclear why we’d be having this meeting if it’s not meant to be a start to serious talks between the two parties.”

Obama and his party accuse Republicans of trying to force them into defunding or delaying Obamacare by using as leverage the need to fund the government and increase the Treasury’s capacity to borrow money to pay U.S. bills.

“If we get in the habit where a few folks, an extremist wing of one party … are allowed to extort concessions based on a threat of undermining the full faith and credit of the United States, then any president that comes after me … will find themselves unable to govern effectively,” Obama said. “And that is not something that I’m going to allow to happen.”

White House spokesman Jay Carney told reporters that it was Republicans attaching partisan demands to what should be congressional responsibilities to fund the government and ensure it can meet its debt obligations.

Shutdown means furloughs for up to 800,000

The GOP-led House didn’t rest on its laurels Wednesday — pushing through piecemeal spending measures that would fund specific programs, though there’s no indication they will go anywhere in the Democratic-led Senate.

The incremental approach pushed by Sen. Ted Cruz of Texas seeks to pressure Democrats to approve spending for programs that Republicans like, but not Obamacare.

An initial effort Tuesday failed because the short-term proposals comprising a tiny portion of the overall federal budget lacked the necessary two-thirds majority support due to Democratic opposition.

But on Wednesday, the House did manage to pass — with majority support — bills to fund national parks, the National Institutes of Health and District of Columbia operations.

Obama has signaled he’d veto those measures should they reach his desk. That’s unlikely given that Senate Majority Leader Harry Reid has dismissed the approach as “reckless and irresponsible.”

Democratic Rep. Louise Slaughter of New York said the easiet solution was for the House to approve the spending proposal for the entire government sent over by the Senate, which lacks any of the anti-Obamacare provisions demanded by Cruz and his allies.

First shutdown in nearly 18 years

Both parties have refused to budge from their visions for the budget and, beyond that, health care reform. The Democratic-led Senate, for instance, has rejected four separate House GOP spending proposals that would either delay or defund Obamacare — insisting that the Republican-led House pass a Senate approved measure to continue funding the government without add-ons or qualifications.

In addition to the government shutdown — the first since a 21-day stalemate during the Clinton administration some 18 years ago — also looming is the October 17 deadline to raise the debt ceiling. Obama and congressional leaders all say that no one wants the stalemate to spread to that issue, which could mean a U.S. default. But no progress has occurred on finding a solution.

Writing Tuesday in USA Today, Boehner dug in his heels on the debt ceiling issue, saying “there is no way Congress can or should pass such a bill without spending cuts and reforms to deal with the debt and deficit.”

Obama offered no indication that he’ll budge. Noting that such Republican brinkmanship in 2011 led to the first-ever downgrade of the U.S. credit rating, he said Tuesday he “will not negotiate over Congress’ responsibility to pay bills it’s already racked up.”

Both Democrats and Republicans say that a clean spending measure — with no Obamacare amendments, as urged by the president and his allies — would pass the House with support from the Democratic minority and moderate Republicans.

So far, Boehner has succumbed to pressure from the tea party right to avoid a vote that would pass something without causing some harm to the health care reforms.

One problem is that conservative House Republicans from home districts with no realistic Democratic challenge feel emboldened to pursue a more extremist ideology backed by their supporters, he said.

“More people say raise the debt ceiling and fight the health care debate somewhere else,” CNN Chief National Correspondent John King noted. “But there’s enough here, if you think of a Republican going home to his district, there’s enough here to understand why the Republicans think they’re on safe ground dragging this out.”

One moderate Republican who has backed a clean spending measure, Rep. Michael Grimm of New York, said that “both sides have dug in.” Democrats, who he said “won’t even have a discussion,” put House Republicans in a tight spot where they feel compelled to hold their ground or else “set a bad precedent that the Senate would be somewhat dictating how the House runs.”

But if Democrats agreed to listen, Grimm expressed optimism “that we would put a package together and solve the problems at once, so we can get the government funded, stop the shutdown, and also deal with the debt ceiling so we don’t have another crisis a week or two away from now.”

Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House, told CNN that “we may be getting to a place where they’re going to be enough rational Republicans to join with the Democrats” and pass a short-term spending plan to reopen the government and allow for broader talks on funding for the rest of the new fiscal year. That would allow, he said, for a needed “cooling off period.”

A blow to the economy

The shutdown of the government — the country’s largest employer — isn’t happening all at once.

Federal employees who are considered essential will continue working. Those deemed non-essential — up to 800,000 — could be furloughed, unsure when they’ll be able to work or get paid again.

The shutdown could cost the still-struggling U.S. economy about $1 billion a week in pay lost by furloughed federal workers. And that’s only the tip of the iceberg.

While many agencies have reserve funds and contingency plans that would give them some short-term leeway, the economic effect would snowball as the shutdown continued.

The total economic impact is likely to be at least 10 times greater than the simple calculation of lost wages of federal workers, said Brian Kessler, economist with Moody’s Analytics. His firm estimates that a three- to four-week shutdown would cost the economy about $55 billion.

And it’s already had political ramifications extending beyond the United States. On Wednesday, Obama canceled planned visits next week to Malaysia and the Philippines as part of an Asian swing that will include a summit of the Association of Southeast Asian Nations on Bali. Obama will still attend the ASEAN summit, his office said.

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