Obama plans to talk to GOP again on shutdown, debt

With the shutdown in its ninth day today and a potential economy-shaking federal default edging ever closer, neither side was revealing clear signs of bending.

Amid the tough talk, though, there were hints of the possibility of a brief truce. There were indications that both sides might be open to a short-term extension of the $16.7 trillion borrowing limit and a temporary end to the shutdown, giving them more time to resolve their disputes.

Obama was to huddle with House Democrats this afternoon as both parties look for a way forward.

So far, the underlying standoff remains the same. Republicans demand talks on deficit reduction and Obama's 2010 health care law as the price for boosting the government's borrowing authority and returning civil servants to work. The president insists that Congress first end the shutdown and extend the debt limit before he will negotiate.

"Speaker Boehner could end this government shutdown today, an hour from now" by letting the House vote to do so, Senate Majority Leader Harry Reid, D-Nev., said today of House Speaker John Boehner, R-Ohio.

On Tuesday, Boehner told reporters he was not drawing "lines in the sand." He sidestepped a question about whether he'd raise the debt limit and fund government for short periods by saying, "I'm not going to get into a whole lot of speculation."

Hours later, Obama used a White House news conference to say he "absolutely" would negotiate with Republicans on "every item in the budget" if Congress first sent him short-term measures halting the shutdown and the extending the debt limit.

"There's a crack there," Boehner said of the impasse late Tuesday, though he cautioned against optimism.

The White House said Obama would reach out to Boehner's House Republicans in the coming days with an invitation to the White House. He also intends to meet with senators of both parties, officials said.

A White House sit-down with Republican and Democratic congressional leaders last week yielded no progress. But the stakes are growing higher.

The financial world is flashing unmistakable signs that it fears Washington's twin battles could hurt the economy.

The International Monetary Fund's financial counselor, Jose Vinals, said a failure by Congress to raise the federal debt ceiling and a subsequent U.S. default would cause "a worldwide shock."

Also, the National Retail Federation became the latest business group to urge lawmakers to quickly end their standoff. In a letter to congressional leaders, federation President Matthew Shay wrote Congress must "reverse the economic crisis it has created through the shutdown while it is still a short-term crisis and not the beginning of another recession."

The Obama administration has said that unless Congress acts, it expects to have an estimated $30 billion in cash left by Oct. 17. That is pocket change for a government that can spend tens of billions more than that on busy days and $3.6 trillion a year.

Hitting that date without congressional action would risk an unprecedented federal default that would wound the economy and deal lasting harm to the government's ability to borrow money, many economists warn. Some Republicans have expressed doubt that the damage would be as severe.

In the House, Republicans were continuing their tactic of pushing through narrowly targeted bills — over Democratic objections — that would restart popular parts of the government.

Today they planned votes on a measure financing death benefits to families of fallen U.S. troops. Blaming the shutdown, the Pentagon has halted the $100,000 payments, usually made within three days of a death.

The stoppage of those payments drew the attention of Senate chaplain Barry Black, who in his prayer opening today's Senate session said, "When our federal shutdown delays payments of death benefits to families of children dying in faraway battlefields, it's time for our lawmakers to say, 'Enough is enough.' "

But an official of a conservative group that has pressed Republicans to try repealing Obama's health care law was unyielding Wednesday, saying that fight should continue.

"We should not fund the government until we address the president's unfair, unaffordable and unworkable law," Michael Needham, chief executive officer of Heritage Action for America, said at a Christian Science Monitor breakfast.

On Tuesday, Senate Democrats introduced legislation letting the government borrow money through Dec. 31, 2014. It contained no spending cuts or other deficit-cutting steps many Republicans seek.

The bill's fate was uncertain, since the 54 votes Democrats can usually muster are short of the 60 votes they would need to overcome a conservative filibuster aimed at derailing the bill. An initial test vote seemed likely by Saturday.

Obama said he would negotiate, but added: "I'm not going to do it until the more extreme parts of the Republican Party stop forcing John Boehner to issue threats about our economy. We can't make extortion routine as part of our democracy."

Two hours later, Boehner stood firm.

"What the president said today was if there's unconditional surrender by Republicans, he'll sit down and talk to us," Boehner said. "That's not the way our government works."

Meanwhile, Rep. Paul Ryan, Republican chairman of the House Budget Committee and the party's 2012 candidate for vice president, proposed in a Wall Street Journal op-ed published Wednesday that the stalemate be resolved by having both sides agree to "common sense reforms of the country's entitlement programs and tax code."