Both sides harden stances potential default nears
WASHINGTON - House Speaker John A. Boehner on Sunday defiantly rejected calls to reopen the government and raise the federal debt limit, warning that the nation is headed for a first-ever default unless President Obama starts negotiating with Republicans.
"That's the path we're on," Boehner (R., Ohio) said on ABC's This Week. Of Obama, he added: "He knows what my phone number is. All he has to do is call."
Sitting for his first television interview since congressional gridlock shut down most federal agencies nearly a week ago, Boehner sought to dispel the perception that he has been cornered by right-wing rebels and is desperately looking for a way out. In recent days, rank-and-file Republicans have said Boehner has told them he will not let the nation default on its obligations, even if that means raising the nation's borrowing limit primarily with Democratic votes.
On Sunday, Boehner said he has no intention of collapsing in unconditional surrender. "We are not going to pass a 'clean' debt-limit increase" - one without more concessions from Democrats - he said.
"I told the president, there's no way we're going to pass one. The votes are not in the House to pass a clean debt limit," Boehner said. "And the president is risking default by not having a conversation with us."
As Boehner hardened his stance, the White House did the same, dispatching Treasury Secretary Jack Lew to appear on four of the six major Sunday talk shows. Repeatedly, Lew said Obama is willing to enter negotiations to address the nation's long-term budget problems but not until Republicans drop their campaign against Obama's health-care initiative, end the shutdown, and lift the $16.7 trillion debt limit.
"We just spent the last several months with Congress creating this ridiculous choice where either you repeal the Affordable Care Act or you shut down the government or default on the United States. That is not the way we should do business," Lew said on Fox News Sunday.
Republicans "need to open the government. They need to fund our ability to pay our bills," Lew said. "And then we're open to negotiation."
The standoff leaves a shuttered Washington hurtling toward a potentially devastating deadline on Oct. 17, when Lew has said he will exhaust available measures to conserve cash and begin relying entirely on incoming revenue.
Lew ducked questions Sunday about whether that means the nation would immediately default. He said that he cannot predict when he will run short of cash to make required payments and warned that lawmakers are "playing with fire" if they do not act fast to grant him additional authority to borrow.
Independent analysts have offered a more specific timetable, saying default is likely no later than Nov. 1, when the Treasury Department is scheduled to make nearly $60 billion in payments to Social Security recipients, Medicare providers, civil-service retirees, and active-duty military service members.
"I see no way Treasury could make the obligations of that day" without additional borrowing authority, said Nancy Vanden Houten, a senior analyst at Stone & McCarthy Research Associates who studies the Treasury Department's borrowing needs.
How Impasse May End
Key lawmakers and aides lay out several possibilities, all of which face huge political impediments:
House Speaker John A. Boehner could pass bills to reopen the government and raise the debt ceiling - with few or any concessions by Democrats - if he decided to anger conservatives in his 232-person caucus and rely heavily on Democrats' votes.
Both sides yield a bit
Democrats conceivably could offer a few concessions that might help Boehner attract a slim majority of his House Republicans. For instance, they could agree to lift a tax on medical devices that helps fund the new health law or approve the Keystone pipeline to carry oil from Canada.
Republicans would have to agree to higher taxes, which they oppose. And Democrats would have to swallow cuts in the growth of Social Security and Medicare benefits. President Obama and Boehner failed to reach such an accord in 2011 and again last December. Leaders of both parties say problems that killed those negotiations remain, and it's nearly impossible to resolve them before Oct. 17.
Many House Republicans predict the president will give ground to avoid a government default. They point to his past concessions, such as agreeing to raise income taxes only on households earning $450,000 or more, rather than the $250,000 cutoff he had campaigned for. Democrats believe Obama will hold fast. The president "is not going to negotiate the full faith and credit of the United States," said Rep. David Price (D., N.C.).
The government defaults
If both parties stick to their promises, default appears inevitable. The economic impact and public backlash might prompt lawmakers to hastily agree to raise the debt ceiling and start paying bills again.