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Danger of U.S. default looms

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Specialist Fabian Caceres works on the floor of the New York Stock Exchange on Monday.

RICHARD DREW / THE ASSOCIATED PRESS Enlarge Image

Specialist Fabian Caceres works on the floor of the New York Stock Exchange on Monday.

WASHINGTON -- A possible national default loomed closer on Monday as the partial government shutdown lingered, rattling markets in the U.S. and overseas. A gridlocked Congress betrayed little or no urgency toward resolving either of the threats.

Stocks got a case of the jitters on Wall Street, and halfway around the world China stressed the importance for the international economy of raising the U.S. debt limit.

"Safeguarding the debt is of vital importance to the economy of the U.S. and the world," Vice Finance Minister Zhu Guangyao said, according to the official Xinhua News Agency. China holds $1.277 trillion in U.S. Treasury bonds, second only to Japan.

At home, the political rhetoric was unchanged -- and generally uncompromising -- while a new poll suggested Republicans are paying a heavier price than Democrats for the deadlock.

U.S. President Barack Obama said the House should vote immediately on ending the partial closure of the federal establishment. He accused House Speaker John Boehner of refusing to permit the necessary legislation to come to the floor because he "doesn't apparently want to see the... shutdown end at the moment, unless he's able to extract concessions that don't have anything to do with the budget."

Boehner, in rebuttal, called on Obama to agree to negotiations on changes in the nation's health-care overhaul and steps to curb deficits, the principal GOP demands for ending the shutdown and eliminating the threat of default.

"Really, Mr. President. It's time to have that conversation before our economy is put further at risk," the Ohio Republican said in remarks on the House floor.

Obama said he would talk with the Republicans on those topics or virtually any others. But the White House has said repeatedly the president will not negotiate until the government is fully reopened and the debt limit has been raised to stave off the nation's first-ever default.

White House aide Jason Furman told reporters if Boehner "needs to have some talking point for his caucus that's consistent with us not negotiating... that's not adding a bunch of extraneous conditions, of course he's welcome to figure out whatever talking point he wants that helps him sell something."

The current standoff is the latest in a string of clashes over the past three years between Obama and a House Republican majority that has steered to the right with the rise of the tea party.

Most Democrats and many Republicans have assumed the GOP will pay a heavier price for a shutdown than the Democrats, since that was the case in 1996.

And a survey released by the Washington Post-ABC said disapproval of Republicans was measured at 70 per cent, up from 63 per cent a week earlier. Disapproval of Obama's role was statistically unchanged at 51 per cent.

In the Senate, where majority Democrats forced approval of legislation before the shutdown aimed at preventing it, officials said Majority Leader Harry Reid was drafting a bill to raise the current $16.7-trillion debt ceiling before the Oct. 17 deadline when Treasury Secretary Jacob Lew has said the government will reach its borrowing limit.

The measure would allow the government to meet its borrowing needs through the 2014 elections, officials said, although few details were immediately available.

Assuming Democratic support, the bill could pass the Senate quickly if Republicans merely vote against it as they press for concessions from the White House. But passage could be delayed until Oct. 17 if the GOP decides to mount a filibuster.

Separately, a White House aide said Obama would be receptive to an interim, short-term measure to prevent default.

In the House, Republicans declined to say when they would put debt limit legislation on the floor for a vote.

Instead, the public agenda for the day consisted of legislation to reopen the Food and Drug Administration, the latest in a string of measures to soften the impact of the partial shutdown.

Earlier House-passed bills would end the shutdown at national parks, the National Guard and Reserves and the Women, Infants and Children nutrition program, and ease effects for the Washington, D.C., government, among other locations.

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition October 8, 2013 A8

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