US govt shutdown: No progress on stalemate
Washington: President Barack Obama has sent Wall Street a blunt warning that it should be very worried about a political crisis that has shut down the government and could trigger a US debt default. Obama said he was “exasperated” by the budget impasse in Congress, in an interview with CNBC apparently designed to pressure Republicans by targeting the financial community moments after markets closed.
The president then met Republican and Democratic leaders for their first talks since the US government money’s ran out and it slumped into a shutdown now well into its second day.
But few informed observers held out much hope for a sudden breakthrough. Obama was asked in the interview whether Washington was simply gripped by just the latest in a series of political and fiscal crises which reliably get solved at the last minute. In unusually frank comments on issues that could sway markets, Obama warned that investors should be worried. “This time’s different. I think they should be concerned,” Obama said, in comments which may roil global markets.
“When you have a situation in which a faction is willing potentially to default on US government obligations, then we are in trouble,” Obama said. Obama said he would not negotiate with Republicans on budget matters until House lawmakers pass a temporary financing bill to reopen federal operations and raised the USD 16.7 trillion dollar debt ceiling. If the borrowing limit is not lifted by the middle of the month, the US government could default on its debts for the first time in history.
“If and when … that vote takes place and the government reopens, and if and when they vote to make sure Congress pays our bills on time so America does not default on costs it’s already accrued, then I am prepared to have a reasonable, civil negotiation around a whole slew of issues,” Obama said. The president said he had “bent over backwards” to accommodate Republicans — a statement his foes would dispute — but warned it would set a terrible precedent to allow lawmakers of any party to hold a White House to ransom over raising the debt ceiling.
“Absolutely I am exasperated, because this is entirely unnecessary,” Obama said.
The US government closed non-essential operations on Tuesday after Congress failed to strike a deal on spending and budget due to differences over ‘Obamacare’, the signature healthcare programme of President Obama. Republicans and Democrats are blaming each other for the impasse.
The shutdown has left nearly 800,000 employees on unpaid leave and closed national parks, tourist sites, government websites, office buildings, and more. “All we want you to do is open the government,” Senate Majority Leader Harry Reid told reporters, blaming the Republicans in the House of Representatives for this unprecedented event in nearly 18 years.
“All we have to do is bring it up, pass it in the House. It comes to the president’s desk. Government is open. Then we go to the table, as the leader suggests, on the budget, and some of that discussion can be helpful in terms of addressing growth, deficit reduction and how we go forward on the debt ceiling,” Nancy Pelosi, the House Democratic Leader said.
Reid supported Obama’s decision not to budge under pressure from the Republicans. “It just has never happened before where a political party would be willing to take the country to the brink of financial disaster and say we’re not going to allow us to pay our bills,” Reid said. “For the good of the order and the confidence of the American people, we should take the debt ceiling debate off the table. The United States of America will always honor the full faith and credit of our country.” (Agencies)