U.S. policy makers seek way out of gov't shutdown, debt default crisis

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U.S. policy makers seek way out of gov't shutdown, debt default crisis

(Xinhua) 08:23, October 08, 2013

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WASHINGTON, Oct. 7 -- As the fiscal stalemate over U.S. federal government's budget and borrowing authority lingers, there are positive signs on Monday that U.S. policy makers are mulling over a way out of the logjam.

U.S. President Barack Obama on Monday said he is willing to discuss the government budget and fiscal policy with Republicans to end the partial government shutdown.

During a visit to the headquarters of the Federal Emergency Management Agency (FEMA) in Washington D.C., Obama said he is willing to engage with Republicans on talks involving any budget and fiscal issue.

The U.S. federal government lurched into a shutdown after Congress failed to pass a funding bill before Oct. 1, the first day of the 2014 fiscal year. Republicans in the House of Representatives were demanding changes to Obama's signature health care law, the Obamacare, in exchange for funding the government, which the White House opposes. The first government shutdown in 17 years has affected about 800,000 non-essential federal government workers.

"I have said from the start of the year that I'm happy to talk to Republicans about anything related to the budget. There's not a subject that I am not willing to engage in, work on, negotiate, and come up with common-sense compromises on," Obama said, the first time for him to show some signs of flexibility during the government shutdown.

"The President's refusal to negotiate is hurting our economy and putting our country at risk," U.S. House Speaker John Boehner, the top Republican lawmaker, said on the House floor on Monday.

Washington faces another fiscal deadline as U.S. Treasury Secretary Jacob Lew has told Congress that the federal government will reach its debt ceiling of 16.7 trillion U.S. dollars by Oct. 17, and failure to raise it by U.S. Congress would lead to a catastrophic default. However, Democrats and Republicans have not found a way to end the fiscal deadlock.

The focus of the fiscal wrangle between Democrats and Republicans has now moved to raising the Treasury Department's debt limit to avert a debt default crisis.

Speaking at an event hosted by U.S. newspaper Politico on Monday, Obama's top economic adviser Gene Sperling said that it was up to Congress to decide whether to approve a short-term or long-term debt limit increase.

"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. That said, it is the responsibility of Congress to decide how long and how often they want to vote on doing that," said Sperling, director of National Economic Council (NEC).

Sperling's view was echoed by White House spokesman Jay Carney, who told reporters on Monday during the White House press briefing that a long-term debt ceiling increase that averts another confrontation like the current one for a longer period of time is a good thing.

"And we would support what Senate Democrats are initiating now, which is a bill that would extend the debt ceiling for a year," Carney said.

However, Obama stressed that he cannot negotiate with Republicans under the threat of a debt default, urging Congress to reopen the government and raise the government's borrowing authority immediately.

"What I've said is that I cannot do that under the threat that if Republicans don't get 100 percent of their way they're going to either shut down the government or they are going to default on America's debt so that America for the first time in history does not pay its bills," Obama said.