• Offers for debt extension suggest progress possible
    By DAVID ESPO
    The Associated Press | October 11,2013
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    WASHINGTON — On a day crammed with rising and falling hopes, President Barack Obama and congressional Republicans groped inconclusively Thursday for common ground that could avert an economy-tanking default and possibly end the 10-day-old partial government shutdown.

    “We expect further conversations tonight,” Majority Leader Eric Cantor, R-Va., said cryptically at nightfall, after he, Speaker John Boehner and a delegation of House Republicans had met for more than an hour with Obama at the White House.

    The White House issued a statement describing the session as a good one but adding that “no specific determination was made.”

    The up-and-down day was capped by news in the evening that Obama had signed a bill to continue financial benefits to families of fallen troops during the government shutdown.

    Final passage of the military benefits bill came a day after Defense Secretary Chuck Hagel said a military charity, the Fisher House Foundation, would make the benefit payments during the shutdown. The lapse in funding meant the Pentagon had no authority to continue the payments.

    The Pentagon typically pays out $100,000 within three days of a service member’s death.

    Also Thursday, a dour warning came from Treasury Secretary Jack Lew, who told lawmakers that the prospect of default had already caused interest rates to rise — and that worse lay ahead.

    Appearing before the Senate Finance Committee, Lew said the Treasury must pay Social Security and veterans benefits as well as salaries to active duty military troops during the second half of this month. He said failure to raise the debt limit by Oct. 17 “could put timely payment of all of these at risk.”

    Whatever the outcome, it seemed the end game was at hand in a pair of crises that had bedeviled the divided government for two weeks, rattled markets in the U.S. and overseas and locked 350,000 furloughed federal workers out of their jobs.

    Senate Majority Leader Harry Reid advanced legislation in that chamber to simply raise the debt limit and stave off the threat of an unprecedented federal financial default — a measure that Republicans are likely to block unless he agrees to change it.

    In the House, Boehner left open the possibility of launching a rival measure today.

    As he described it for his rank and file in a closed-door morning session in the Capitol, it would leave the shutdown in place while raising the nation’s $16.7 trillion debt limit and setting up negotiations between the GOP and the president over spending cuts and other issues.

    At the White House, spokesman Jay Carney told reporters the president would “likely sign” a short-term extension in the debt ceiling and did not rule out his doing so even if it left the shutdown intact.

    Reid wasn’t nearly as amenable. “Ain’t gonna happen,” he said brusquely.

    By the time House Republicans had returned from the White House hours later, Rep. Hal Rogers, R-Ky., said part of their hope was to “quickly settle” on legislation to permit the government to reopen.

    Heartened by any hint of progress, Wall Street chose to accentuate the positive. After days of decline, the Dow Jones industrial average soared 323 points on hopes that the divided government was taking steps to avoid a default. Reid’s dismissive comments at the White House came at the end of the trading day.

    After more than a week of lost tourism, some governors prevailed on the Obama administration to let states use their own money to pay for national parks to reopen, Grand Canyon and Zion among them. There was a catch: The Interior Department made it clear it didn’t plan to reimburse the states after the shutdown ends.

    Senate Republicans forged ahead on an alternative of their own that would ease both the debt-limit and shutdown crises at once. Officials said it would require Obama to agree to some relatively modest changes to the health care law that stands as his signature domestic achievement.

    Some tea party-aligned lawmakers claimed partial credit for the GOP retreat, casting it as a way of finessing one problem so they could quickly resume their own campaign to deny operating funds for the national health care overhaul known widely as Obamacare.

    Ironically, Boehner’s plan stirred grumbling among relatively moderate Republicans who said the shutdown should end, but little if any unhappiness among the staunch conservatives who often part company with party leaders.

    Since the standoff began, Republican demands have shifted continuously, while the president’s position has remained essentially unchanged.

    The shutdown began Oct. 1 after Obama ruled out any concessions that would defund, delay or otherwise change the new health care law. He said he would be willing to negotiate on a range of issues, but only after the shutdown was ended and the debt limit raised.

    For their part, Republicans drafted a long list of demands to accompany any increase in the debt limit, including some that would raise the cost of Medicare for better-off beneficiaries, make changes to the health care law and roll back several environmental regulations either issued or in the planning stages by the administration.

    In recent days, the focus has shifted from the shutdown to the threat of default, and Republicans have spoken less and less frequently about insisting on concessions in the health care law.
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