Budget, debt unresolved on shutdown's 3rd day

Hill leaders, Obama trade blame as shutdown enters 3rd day; debt limit looms as riskier threat

Associated Press
Obama cancels Asia trip to deal with shutdown
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President Barack Obama speaks about the government shutdown and debt ceiling during a visit to M. Luis Construction, which specializes in asphalt manufacturing, concrete paving, and roadway reconstruction, Thursday, Oct. 3, 2013, in Rockville, Md. (AP Photo/Charles Dharapak)

WASHINGTON (AP) -- Three days into a government shutdown, President Barack Obama pointedly blamed House Speaker John Boehner on Thursday for keeping federal agencies closed, while the bitter budget dispute moved closer to a more critical showdown over the nation's line of credit. The president canceled a trip to Asia to remain in the capital as the Treasury warned of calamitous results if Congress fails to raise the debt limit.

Answering Obama, Boehner complained that the president was "steamrolling ahead" with the implementation of the nation's new health care law. As the government operated sporadically, the stock market sank to its lowest level in nearly a month.

The shutdown was clearly leaving its mark. The National Transportation Safety Board wasn't sending investigators to Tennessee to probe a deadly church bus crash that killed eight people and sent 14 others to the hospital. The Labor Department said it wouldn't release the highly anticipated September jobs report on Friday because the government remains shuttered.

Late Thursday, the White House announced that Obama was abandoning an already abbreviated trip to Indonesia and Brunei next week in the face of the shutdown. White House spokesman Jay Carney said Secretary of State John Kerry would travel instead.

Earlier, outside the Capitol, shots rang out at midafternoon bringing an already tense Congress under lockdown, a nerve-wracking moment in a city still recovering from a Sept. 16 mass shooting at the Navy Yard. Authorities and witnesses said a woman tried to ram her car through a White House barricade then led police on a chase that ended in gunfire and her death outside the Capitol more than 1 mile away.

Despite the heated political rhetoric, some signs of a possible way out of the shutdown emerged. But the state of play remained in flux.

Two House Republicans said Boehner told them he would allow a House vote on restarting the entire government — but only if conservative GOP lawmakers assured him they would not attack it for failing to contain curbs on the health care law. So far they have been unwilling to give that commitment. The two spoke on condition of anonymity to reveal details of private discussions.

The shutdown and the approaching debt ceiling were merging into one confrontation, raising the stakes for the president and Congress as well as for the economy.

Obama and his Treasury Department said that failure to raise the nation's borrowing limit, expected to hit its $16.7 trillion cap in mid-October, could precipitate an economic nosedive worse than the Great Recession. A default could cause the nation's credit markets to freeze, the value of the dollar to plummet and U.S. interest rates to skyrocket, according to the Treasury report.

Obama catalogued a litany of troubles that could be caused by the failure to raise the debt ceiling, from delayed Social Security and disability checks to worldwide economic repercussions. "If we screw up, everybody gets screwed up," he said.

The speaker's office reiterated Boehner's past assertion that he would not let the United States default on its debt. "But if we're going to raise the debt limit, we need to deal with the drivers of our debt and deficits," his spokesman, Michael Steel, said. "That's why we need a bill with cuts and reforms to get our economy moving again."

Conservatives have insisted that either reopening the government or increasing the debt ceiling must be accompanied by a measure that either delays or defunds the nation's new health care law. Absent those concessions, Republicans want cuts in spending, savings in major benefit programs and an overhaul of the tax system.

Obama, for his part, firmly restated his opposition to a negotiation.

"You don't get to demand some ransom in exchange for keeping the government running," he said tartly. "You don't get to demand ransom in exchange for keeping the economy running."

Looking to deflect the Democratic finger-pointing on the shutdown, the Republican-controlled House pushed a pair of bills through the House on Thursday restoring money to veterans' programs and to pay National Guard and Reserve members. House leaders also have scheduled a vote on legislation backed by some of the chamber's top Democrats to give federal workers furloughed in the ongoing partial shutdown their missed pay when the government reopens.

That vote could come as early as Friday or over the weekend.

Senate Democrats made clear they will not agree to reopening the government on a piecemeal basis. "You can't fall for that legislative blackmail or it will get worse and worse and worse," said Sen. Chuck Schumer of New York.

Speaking at a construction company in Washington's Maryland suburbs Thursday, Obama cast Boehner as a captive of a tight group of conservative Republicans who want to extract concessions in exchange for passing a short-term spending bill that would restart the partially shuttered government.

"The only thing preventing people from going back to work and basic research starting back up and farmers and small business owners getting their loans, the only thing that is preventing all that from happening right now, today, in the next five minutes is that Speaker John Boehner won't even let the bill get a yes or no vote because he doesn't want to anger the extremists in his party," Obama said.

Senate Majority Leader Harry Reid, D-Nev., was even more pointed in singling Boehner out.

"We can't perform the most basic functions of government because he doesn't have the courage to stand up to that small band of anarchists," he said.

Moderate Republicans have said they think they could provide enough votes to join with minority Democrats and push a bill through the House reopening the government with no restrictions on the health care law. But under pressure from House GOP leaders, they failed to join Democratic efforts on Wednesday aimed at forcing the chamber to consider such legislation.

Rep. Tom Cole, R-Okla., who is close to Boehner, said he doesn't think the speaker is ready to push any measure that would fail to win the backing of most of his 232 House Republicans. But some Democratic votes eventually will be needed in the 435-seat chamber, Cole said, because some hard-core conservative Republicans are unlikely to vote to end the shutdown or raise the debt ceiling without major concessions from Obama.

"You can't ask those Republicans to just put their political life on the line for nothing," he said. "They've got to be able to go home and say 'These are the things that I was able to do.'"

Even the Senate chaplain got drawn into the rising intensity of the partisan battle, opening Thursday's session with an unusually pointed prayer.

"Deliver us from the hypocrisy of attempting to sound reasonable while being unreasonable," said Dr. Barry Black. "Remove the burdens of those who are the collateral damage of this government shutdown."

And in a bit of sardonic understatement, Obama's motorcade passed workers outside an office building holding up a sign that simply asked, "Rough week?"

___

Associated Press writers Charles Babington, Alan Fram, Nedra Pickler, Connie Cass, Andrew Taylor and Julie Pace contributed to this report.

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