Mon, Oct 14, 2013 - Page 1 News List

US Senate meets over fiscal impasse

NEGOTIATIONS:The Democratic Senate majority leader said he held ‘extremely cordial, but very preliminary’ talks with top Republican Senator Mitch McConnell on Saturday


The US Senate was to hold a rare Sunday session yesterday as US politicians grapple with how to reopen the shuttered government and avoid a potentially calamitous failure to pay the country’s debt obligations.

With Republicans in the US House of Representatives blaming US President Barack Obama for the collapse of talks on extending the US borrowing authority, the Senate’s Republican and Democratic leaders scrambled to piece together a bipartisan exit strategy.

The top senators showed an intensifying desire to end the two-week government shutdown and ease the threat of default with just three working days left before the US Department of the Treasury’s Thursday deadline for raising the debt ceiling.

Democratic Senate Majority Leader Harry Reid, Obama’s top wingman in the US Congress, said he held “extremely cordial, but very preliminary” talks on Saturday with top Republican Senator Mitch McConnell.

McConnell suggested a bipartisan offer spearheaded by moderate Republican Senator Susan Collins as a workable template, but Reid rejected it.

The measure would extend borrowing authority into next year and fund the government for six months, but it would also repeal a medical device tax introduced under Obama’s healthcare law.

Democratic leaders were most concerned with the proposal to keep the existing automatic spending cuts, a move that would put agency spending at US$70 billion below what Democrats have proposed for next year.

With negotiations with the Republican-controlled House in tatters, Obama called a snap meeting at the White House with the Senate’s Democratic leadership to regroup.

Obama on Saturday made clear that he wanted a long-term deal, rejecting a proposal floated by House Speaker John Boehner suggesting a six-week extension to the US borrowing authority.

House Republicans fumed over the change of heart.

“They felt they were duped,” Representative John Fleming said of the House leadership as he exited a Republican caucus meeting. “They were led to believe that the president did want to negotiate in good faith and now they find out that that was never in the cards.”

House Republicans have argued for any budget deal to include concessions on funding Obama’s healthcare reforms, while Senate Republicans are more willing to reopen the government without such conditions.

Some lawmakers were adamant that the House — which does not meet again until today, when world markets might start seriously digesting Washington’s impasse — remains the linchpin for any agreement.

On Friday, the framework of a possible deal appeared to be forming that would see the government, shuttered since Oct. 1, fully reopened, possibly on an interim basis.

Both sides would also commit to work toward an elusive deal to tackle the deficit, rein in spending and possibly reform social programs and some aspects of the tax code.

However, perhaps sensing that it now has the upper hand in the fight, the White House has rejected the idea of extending the borrowing authority by just six weeks.

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