Boehner Offering Obama Short-Term Debt Extension

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By ANDREW TAYLOR
Associated Press

WASHINGTON (AP) — Facing a fresh deadline, House Speaker John
Boehner said Thursday that Republicans would vote to extend the
government's ability to borrow money for six weeks – but still leave the
government shutdown in place pending fresh negotiations with President
Barack Obama and the Democrats.

Obama has insisted the shutdown be ended immediately, with no conditions.

“I
would hope the president would look at this as an opportunity and a
good faith effort on our part to move halfway, halfway to what he's
demanded, in order to have these conversations begin,” Boehner, R-Ohio,
told reporters after presenting the plan to rank-and-file GOP lawmakers.

Boehner
produced the proposal as the shutdown entered its 10th day. On that
front, the administration said it would allow states to use their own
money to reopen some national parks that have been closed.

Governors
in at least four states – Utah, South Dakota, Arizona and Colorado -
have asked for authority to reopen national parks within their borders
because of the economic impacts caused by the park closures. Interior
Secretary Sally Jewell said the government will consider offers to pay
for park operations but will not surrender control of national parks to
the states.

As for the deeper problem of the
federal debt ceiling, the administration has warned that unless the
limit is raised, the government will deplete its ability to borrow money
by next Thursday, an event officials have warned could trigger an
unprecedented U.S. financial default that could wound the world economy
as well as America's .

After weeks of decline,
financial market indexes shot higher in anticipation of a possible deal
that could avert a default. Both the Dow Jones industrial average and
Standard & Poor's 500 index were up more than 1 percent in midday
trading.

Boehner planned to present the offer
to Obama later Thursday when he and other House GOP leaders were to meet
with the president at the White House.

A
White House official said Obama would be willing to negotiate over the
budget “once Republicans in Congress act to remove the threat of default
and end this harmful government shutdown.”

Obama
has steadfastly insisted that Congress reopen the government and extend
the debt limit without conditions. His acceptance of the GOP proposal
could mean a brief resolution to the fight over the debt limit and a
continuation of the shutdown while negotiations proceed.

Republicans
have been demanding cuts in government programs, including Obama's 2010
health care law, and a bigger effort to cut long-term federal deficits
as their price for reopening government and extending the debt limit.

Obama
has repeatedly noted recent improvement in the deficit figures. After
four years of trillion-dollar deficits, the 2013 shortfall is expected
to register below $700 billion.

Rep. Vern Buchanan, R-Fla., said the plan was for the House to approve the legislation Boehner described on Friday.

“It
gets us down the road a little bit so they can continue to talk,” said
Rep. Tim Griffin, R-Ark. Rep. Robert Pittinger, R-N.C., said the
six-week extension would provide “an opportunity to bring the parties
together.”

Some conservatives still expressed
reservations. “I'm not very enthusiastic about that,” Rep. Steve King,
R-Iowa, said of Boehner's plan.

Under
Boehner's offer, the House would also appoint negotiators to bargain
with the Democratic-led Senate over a budget compromise. Those talks
have been on hold for months, and the two chambers have deep differences
over taxes and cuts in benefit programs.

Earlier
Thursday, Treasury Secretary Jacob Lew warned the Senate Finance
Committee that failure to renew the government's ability to borrow money
“could be deeply damaging” to financial markets and threaten Americans'
jobs and savings. It would also leave the government unsure of when it
could make payments ranging from food aid to Medicare reimbursements to
doctors, he said.

“The United States should
not be put in a position of making such perilous choices for our economy
and our citizens,” the secretary said. “There is no way of knowing the
irrevocable damage such an approach would have on our economy and
financial markets.”

The GOP plan would permit
the government to borrow to meet its bills through Nov. 22. Unlike a
plan enacted in February, the deadline would be hard and fast since it
would block Lew from using accounting maneuvers known as extraordinary
measures to create headroom under the $16.7 trillion borrowing limit.

The
game of Washington chicken over increasing the debt limit – required so
Treasury can borrow more money to pay the government's bills in full
and on time – already has sent the stock market south, spiked the
interest rate for one-month Treasury bills and prompted Fidelity
Investments, the nation's largest manager of money market mutual funds,
to sell federal debt that comes due around the time the nation could hit
its borrowing limit.

At the Finance committee
hearing, Lew met a buzz saw of incredulity from Republicans, who said
the bigger problem was the soaring costs of benefit programs like Social
Security and Medicare and the long-term budget deficits the country
faces. Many expressed doubt about Lew's description of the consequences
of default.

The senior Republican on the
panel, Sen. Orrin Hatch of Utah, accused the Obama administration of “an
apparent effort to whip up uncertainty in the markets.” And veteran
Sen. Mike Enzi, R-Wyoming, said, “I think this is 11th time I've been
through this discussion about the sky is falling and the earth will
erupt. Wyoming families aren't buying these arguments.”

Replied Lew, “After they run up their credit card, they don't get to ignore it.”

Lew
also rejected GOP suggestions that in the event federal borrowing
authority expires, the government could use the dwindling cash it has to
make payments to debt holders and other high priority needs. He said
federal payment systems are not designed to prioritize and said he
didn't believe such an approach was technically possible.

“I think prioritization is just a default by another name,” Lew said.

He
also fended off attempts by the top Republican on the committee, Sen.
Orrin Hatch of Utah, and other GOP senators to learn how long a debt
limit extension the president would like to see.

“Our
view is this economy would benefit from more certainty and less
brinksmanship. So the longer the period of time is, the better for the
economy,” said Lew, who also repeated Obama's willingness to accept a
short-term extension for now.

The frustrating
standoff in Washington is weighing down each side's poll numbers, but
Republicans are taking the worst drubbing. A Gallup poll put the
approval rating for the Republican Party at a record-low 28 percent.
Polls have consistently said the Republicans deserve the greater share
of blame for the shutdown.


Associated
Press Writers Alan Fram, Stephen Ohlemacher, David Espo, Donna Cassata
and Martin Crutsinger contributed to this story.


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