Obama against Republican plan on debt ceiling

 

House Republicans blamed President Barack Obama on Saturday for the collapse of a deal on extending US borrowing authority as the country crept closer to a debt default.

The Agence France Presse reported that the Republicans met behind closed doors on Capitol Hill on the 12th day of a US government shutdown following a bitter budget dispute and an October 17 deadline to raise the debt ceiling.

Earlier this week, Republican had suggested a six-week extension to US borrowing authority — without which Washington could begin to default on its obligations for the first time in history.

But, despite previous comments the White House would be open to such a plan, Obama said Saturday he wanted a long-term deal.

“It wouldn’t be wise, as some suggest, to just kick the debt ceiling can down the road for a couple of months, and flirt with a first-ever intentional default right in the middle of the holiday shopping season,” Obama said in his weekly radio and video address.

Damage “to America’s sterling credit rating wouldn’t just cause global markets to go haywire; it would become more expensive for everyone in America to borrow money.”

The remarks prompted frustration from Republicans and suggested optimism for a deal, which had risen on Friday, were perhaps premature.

“The president is freezing out America, and we’ll do everything we can to make the point that we went to negotiate and he took no offer,” Republican Congressman Darrell Issa told reporters after the meeting.

“The president rejected our deal,” Congressman Raul Labrador had said earlier.

“It’s now up to Senate Republicans to stand up,” he added.

Eric Cantor, Republican majority leader in the House of Representatives, also looked to the Senate for the next move, saying, “Right now I’m hoping the Senate is standing strong, and then we as Republicans can speak with one voice.”

“We’re trying to see a resolution as quickly as possible,” he said.

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

The Senate will move to vote Saturday on a 15-month extension of the debt ceiling, to take the issue off the table until after the mid-term congressional elections next year.

While the measure is unlikely to become law because it needs House support, it could provide a template for an eventual solution in the event of a longer term fiscal deal between Obama and Republicans.

Amid multiple tracks of dialogue Friday, the main principles of a compromise had seemed to emerge in public statements from both sides.

The government, shuttered since October 1, would be fully reopened, possibly on an interim basis, and there would be some kind of commitment from both sides to work towards an elusive deal to tackle the deficit, rein in spending and possibly reform social programs and some aspects of the tax code.

But, perhaps sensing that it now has the upper hand in the fight, the White House now appears to be looking for an extension of borrowing authority from the current $16.7 trillion level for a longer duration.

On Friday, White House spokesman Jay Carney said that a rise in the debt ceiling could not be linked to long-term fiscal talks with Republicans, because it could set up repeated threats of default in the coming months.

One possible compromise plan is being offered by Republican Senator Susan Collins.

The measure would raise borrowing authority for up to a year, fund the government and repeal a tax on medical devices introduced under Obama’s healthcare law — as an incentive to get conservative Republicans on board.