US federal government shutdown persists
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The United States federal government shutdown entered its seventh day with no end in sight as another potential crisis — a possible US default — loomed, sending global stock markets downward.
Lawmakers appeared to be making little headway in raising the US debt ceiling, after the top Republican in Congress ruled out any measure to boost the nation’s borrowing authority without concessions from US President Barack Obama.
The uncompromising talk rattled financial markets early yesterday with the Dow dropping in early trading.
The US must increase its debt ceiling by October 17 or face the possibility of defaulting on its debts, a move that would shake the global economy and financial markets.
Most analysts believe a deal between Republicans in Congress and the White House to avoid default would be reached in time, but investors remain nervous.
Just 10 days before the threat of a default, animosity marked the stalemate with a statement from Democratic Senate Majority Leader Harry Reid, accusing John Boehner, Republican Speaker of the House of Representatives, of a credibility problem and calling on him to allow a vote on a straightforward bill to re-open the government.
A defiant Boehner insisted on Sunday that Obama must negotiate if the president wants to end the shutdown and avert a default that could trigger a financial crisis and recession that would echo 2008 or worse. The 2008 financial crisis plunged the US into the worst recession since the Great Depression.
Boehner also said he lacks the votes to pass a temporary spending bill that would keep the government operating.
Uncompromising position
The No. 2 House Democrat said yesterday that fear among moderate Republicans about the party’s conservative tea party wing was extending the standoff.
Congressman Steny Hoyer said he believes 140 to 160 of the 232 House Republicans “think what’s being done right now is irrational.” Hoyer told MSNBC these lawmakers are “looking over their shoulders” at potential primary challenges from tea party-backed candidates.
Hoyer said Republican friends have told him privately that they don’t understand the uncompromising position taken by the more conservative members of their caucus, lawmakers who have fallen into line with Texas Senator Ted Cruz and others.
Hoyer said the partial government shutdown now in effect is different from past closures “because this is a tactic. This is not a result of the inability to get an agreement.”
Cruz, a force in pushing Republicans to link changes to Obama’s health care law in exchange for keeping the government running, spelled out his conditions for raising the borrowing authority.
Treasury Secretary Jack Lew warned the budget brinkmanship was “playing with fire” and implored Congress to pass legislation to re-open the government.
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