President Barack Obama met with Republican and Democratic leaders in Congress on Wednesday to try to break a deadlock that shut down the federal government, which took effect Monday at midnight, but there was no breakthrough.
After more than an hour of talks, House of Representatives Speaker John Boehner (R-OH) said Obama refused to negotiate, while House Democratic Leader Nancy Pelosi (D-CA) and Senate Democratic Leader Harry Reid (D-NV) accused Republicans of trying to hold the president hostage over Obamacare.
Leaders of the Republican-controlled House of Representatives and the Democratic-led Senate offered token concessions that were quickly dismissed by the other side. Meanwhile, President Obama scaled back a long-planned trip to Asia that was designed to reinforce U.S. commitment to the region.
“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.
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.
Despite the disruption, House 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 Columbia 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.
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.
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.
