President
Barack Obama
met with Republican and Democratic leaders in Congress on Wednesday to
try to break a deadlock that has shut down wide swaths of the federal
government, but there was no breakthrough.
After more than an hour of
talks, House of Representatives Speaker John Boehner said Obama refused
to negotiate, while House Democratic Leader Nancy Pelosi and Senate
Democratic Leader Harry Reid accused Republicans of trying to hold the
president hostage over Obamacare.
Reid said Obama told Republicans "he will not stand" for their tactics.
As
hundreds of thousands of federal employees faced a second day without
pay, leaders of the Republican-controlled House of Representatives and
the Democratic-led Senate offered token concessions that were quickly
dismissed by the other side. Obama, meanwhile, scaled back a
long-planned trip to Asia.
Republicans
have tried to tie continued government funding to measures that would
undercut Obama's signature healthcare law. Obama and his Democrats say
that is a non-starter.
"The
president reiterated one more time that he will not negotiate," Boehner
told reporters after the White House meeting. "All we're asking for here
is a discussion and fairness for the American people under Obamacare."
Reid
said Democrats were willing to discuss any ways to tackle the budget
after a temporary funding bill is passed. "We're through playing these
little
games," he said.
The
shutdown, which took effect Monday at midnight (0400 GMT Tuesday), has
raised questions about Washington's ability to carry out its most
essential duties.
Though it would do relatively little damage to the world's largest
economy in the short term,
global markets could be roiled if Congress also fails to raise the debt limit before borrowing authority runs out in coming weeks.
The
shutdown has closed landmarks like the Grand Canyon and prevented some
cancer patients from receiving cutting-edge treatment.
United Technologies Corp,
which makes Sikorsky helicopters and other items for the military, said
it would be forced to furlough as many as 4,000 employees, if the U.S.
government shutdown continues through next week, due to the absence of
government quality inspectors.
OBAMA EXASPERATED
"Am
I exasperated? Absolutely I'm exasperated. Because this is entirely
unnecessary," Obama told CNBC television in an interview before meeting
the congressional leaders. "I am exasperated with the idea that unless I
say to 20 million people, 'You can't have
health insurance,' these folks will not reopen the government. That is irresponsible."
The
U.S. Army's top general said the shutdown was significantly harming
day-to-day operations, and intelligence leaders say it is undermining
their ability to monitor threats. A Federal Reserve official said it
could delay the central bank's ability to assess whether its monetary
stimulus efforts are still needed.
The
uncertainty in Washington has forced the White House to scale back an
Asia trip that was designed to reinforce U.S. commitment to the region.
Obama
scuttled two stops on a planned four-country tour and left visits to
two other countries up in the air. He was due to leave on Saturday and
return a week later.
Secretary of
State John Kerry will visit Malaysia and the Philippines in his place.
Obama is weighing whether to attend diplomatic
summits in
Indonesia and Brunei, a White House official said.
Despite
the disruption, Boehner's Republicans have failed to derail Obama's
controversial healthcare law, which passed a milestone on Tuesday when
it began signing up uninsured Americans for subsidized health coverage.
Though
some moderate Republicans have begun to question their party's
strategy, Boehner so far has kept them united behind a plan to offer a
series of small bills that would re-open select parts of the government
most visibly affected by the shutdown.
The
Republican-controlled House passed and sent to the Senate a funding
bill that would re-open the National Institutes of Health, which
conducts medical research, and another bill to reopen shuttered federal
parks and museums, such as the Smithsonian museums, the National Gallery
of Art and the Holocaust Memorial Museum in Washington.
Both
bills passed with the support of about two-dozen Democrats, who joined
Republicans. The House was expected to vote Thursday on measures to fund
veterans' care, the District of Colombia and the Army Reserve.
The
measures are likely to be defeated in the Democratic-controlled Senate,
and Obama said he would veto them if they reached his desk.
Still,
they allowed Republicans to charge that their adversaries are standing
in the way of help for elderly veterans and young cancer patients. "Will
they now say 'no' to funding for veterans, our National Parks and the
National Institutes of Health?" asked Boehner spokesman Michael Steel.
Reid
told Republicans he would engage in talks about tax reform, farm policy
and other pressing issues that Congress has failed to address once
Republicans agreed to re-open the government without conditions.
Republicans dismissed that idea.
A
Reuters/Ipsos poll indicated that 24 percent of Americans blamed
Republicans for the shutdown, while 19 percent blamed Obama or
Democrats. Another 46 percent said everyone was to blame.
BIGGER FIGHT LOOMS
The
shutdown fight is rapidly merging with a higher-stakes battle over the
government's borrowing power that is expected to come to a head soon.
Treasury Secretary Jack Lew has said the United States will exhaust its borrowing authority no later than October 17.
The government could have difficulty paying pension checks, interest charges and other bills after that point.
Many
Republicans see the debt limit vote as another opportunity to undercut
Obama's healthcare law or extract other concessions - an approach that
business groups say could lead to disaster.
"You
can re-litigate these policy issues in a political forum, but they
shouldn't use the threat of causing the U.S. to fail on its ...
obligations to repay on its debt as a cudgel," Goldman Sachs chief
executive Lloyd Blankfein told reporters after he and other
financial-industry executives met with Obama.
Some
Democrats have begun to consider asking Obama to unilaterally raise the
debt ceiling on his own - a move that could lead to years of court
battles. The White House has said that approach is not feasible.
Asked
whether there is a push underway among Democrats to convince Obama that
he should use this power, a senior House Democrat who asked not to be
identified said: "No, not at this point."
Stock
investors on Wednesday appeared to show growing anxiety over the
standoff after taking the news in their stride on Tuesday. The S&P
500 and the
Nasdaq both closed down 0.1 percent.
Obama
said Wall Street should be worried about the debt ceiling. "I think
this time's different. I think they should be concerned," Obama told
CNBC. "When you have a situation in which a faction is willing
potentially to default on U.S. government obligations, then we are in
trouble."
A short-term shutdown
would slow U.S. economic growth by about 0.2 percentage points, Goldman
Sachs said on Wednesday, but a weeks-long disruption could weigh more
heavily - 0.4 percentage points - as furloughed workers scale back
personal spending.
The last shutdown in 1995 and 1996 cost taxpayers $1.4 billion, according to congressional researchers.
