Obama calls for end to default threat
US President Obama says in his weekly address the threat of default if Congress doesn't raise debt ceiling is "dangerous."PT0M49S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2vfxl 620 349 October 13, 2013
Washington : With House Republicans blaming President Barack Obama for a collapse of talks on extended borrowing, the US Senate is scrambling to piece together a bipartisan exit strategy.
Amid bitter accusations by House members that the White House did not negotiate in good faith over a face-saving exit to the crisis, the focus shifted abruptly to the Senate on Saturday, where Republicans were claiming "significant progress" towards a solution that would reopen government and ease the threat of default.
For the first time in weeks, Senate Majority Leader Harry Reid, Obama's top wingman in Congress, and top Senate Republican Mitch McConnell entered face-to-face talks.
Tight spot: US President Barack Obama. Photo: Reuters
"The real conversation that matters now is the one that's taking place between McConnell and Reid," Senator Bob Corker told reporters.
"I think the fact that they're actually talking for the first time person to person represents some significant progress," said Senator John Cornyn, the number two Republican in the chamber.
But Reid downplayed hopes of a quick fix.
Asked if an alternative plan to the House offer could be rolled out Saturday, Reid said: "I doubt it."
House Republicans huddled on day 12 of a partial federal shutdown following a bitter budget dispute, and as the nation careens toward an October 17 deadline to raise the debt ceiling.
Earlier this week, House Speaker John Boehner met with Obama and suggested a six-week extension to US borrowing authority - without which Washington could begin to default on its obligations for the first time.
Despite previous comments that the White House would be open to such a plan, Obama said on Saturday he wanted a long-term deal.
"It wouldn't be wise, as some suggest, to just kick the debt ceiling can down the road for a couple of months, and flirt with a first-ever intentional default right in the middle of the holiday shopping season," Obama said.
Damage "to America's sterling credit rating wouldn't just cause global markets to go haywire; it would become more expensive for everyone in America to borrow money."
The remarks prompted frustration from House Republicans.
"They felt they were duped," Congressman John Fleming said of the House leadership.
"They were led to believe that the president did want to negotiate in good faith and now they find out that that was never in the cards."
House Republicans have argued for any budget deal to include concessions on funding Obama's health care reforms, while Senate Republicans are more willing to re-open government without such conditions.
One possible compromise was being offered by Republican Senator Susan Collins.
The measure would raise borrowing authority for up to a year, fund the government and repeal a medical device tax introduced under the health care law - as an incentive to get conservatives on board.
World economies are closely monitoring the impasse, and on Friday the G20 called for Washington to quickly end the paralysis.
Finance chiefs of the globe's most powerful economies said in a statement that "the US needs to take urgent action to address short-term fiscal uncertainties".