US shutdown: no deal struck despite offer to lift debt ceiling
Marked change in tone from White House and Republicans but still no resolution reached
THE White House and Republicans from the House of Representatives failed to reach an agreement yesterday evening during their first serious talks to resolve the US shutdown.
There was hope that a deal might be in sight after Republicans proposed a six-week increase to the country's borrowing limit. If the debt ceiling is not raised by 17 October, the US government is set to run out of cash to pay its bills.
However, the plan floated by Republicans would not end the government shutdown that started last week, making it hard for President Barack Obama to accept the proposal, says the Financial Times.
In a statement, the White House said: "After a discussion about potential paths forward, no specific determination was made. The president's goal remains to ensure we pay the bills we've incurred, reopen the government and get back to the business of growing the economy, creating jobs and strengthening the middle class."
Nevertheless there were reports of a marked change in tone on both sides during the 90-minute meeting between Obama and 20 Republican Congressmen, including House speaker John Boehner.
A Republican spokesman described the talks as "useful and productive", while a spokesman for Obama said the President was "happy that cooler heads seem to be prevailing" but would prefer to see a "long-term resolution".
Ahead of the meeting, Treasury secretary Jack Lew warned that there were unpredictable consequences of the continued brinksmanship. He accused Republicans of underestimating the danger of inadvertently "triggering a stampede among investors" that could rapidly drain remaining reserves, reports The Guardian.
Some have warned that 17 October could bring a "global financial Armageddon" if Congress fails to agree to raise the $16.7 trillion debt ceiling.
The partial US shutdown began on 1 October after the Democrat-dominated Senate and Republican-led House of Representatives failed to agree on next year's budget, clashing over Obama's controversial healthcare law, known as Obamacare. ·