Washington still deadlocked on shutdown and debt ceiling

Reuters

* Republican Boehner: "This is not some damn game"

* Obama says will not negotiate with a gun to Americans'head

* President rejects acting on piecemeal funding bills

By Thomas Ferraro and Caren Bohan

WASHINGTON, Oct 4 (Reuters) - Washington headed into thefifth day of a partial government shutdown with no end in sighteven as another, more serious conflict over raising the nation'sborrowing authority started heating up.

The U.S. House of Representatives prepared for a Saturdaysession but with no expectations of progress on either theshutdown or a measure to raise the nation's $16.7 trillion debtceiling. Congress must act by Oct. 17 in order to avoid agovernment debt default.

Republican House Speaker John Boehner tried on Friday tosquelch reports that he would ease the way to a debt ceilingincrease, stressing that Republicans would continue to insist onbudget cuts as a condition of raising the borrowing authority.

On the shutdown, Boehner said Republicans were holding firmin their demand that in exchange for passing a bill to fund andreopen the government, President Barack Obama and his Democratsmust agree to delay implementation of Obama's health care law.

The launch date for Obamacare health insurance exchangescame and went on Oct. 1, meaning Republicans are now in a moredifficult political position of trying to stop something thathas already begun.

Although essential government functions like nationalsecurity and air traffic control continue, the economic andpolicy effects of the shutdown are amplified the longer hundredsof thousands of federal workers remain at home and unpaid.

Negotiations on tax and free trade treaties are on hold,enforcement of sanctions against Iran and Syria are beinghindered, and a government tester of dangerous consumer productsspends his days at home.

Nerves and sometimes tempers frayed on Friday after severalweeks of long sessions of Congress and non-stop posturing.

"This isn't some damn game," said Boehner, responding to aWall Street Journal article that quoted an unidentified WhiteHouse official saying Democrats were "winning" the shutdownbattle.

The Democratic president reiterated that he was willing tonegotiate with Republicans, but said, "We can't do it with a gunheld to the head of the American people."

"There's no winning when families don't have certainty overwhether they're going to get paid or not," Obama told reporterswhen he visited a downtown Washington lunch spot that wasoffering a discount to furloughed federal government workers.

The shutdown began on Tuesday when the Republican-led Houseof Representatives refused to approve a bill funding thegovernment unless it included measures designed to delay ordefund key provisions of Obama's signature legislation, the 2010Affordable Care Act, which are now being implemented.

Obama again appealed to Boehner to bring a "clean" fundingbill - without reference to the health reforms - to a vote inthe House, where many Democrats believe it could pass with acombination of Democrats and a few of the majority Republicans.

POSSIBLE MANEUVER

Democratic leaders in the House said on Friday they wereworking on a maneuver that, if successful, would force a vote onlegislation to fully reopen the federal government.

The plan involves a rarely used "discharge petition" thatwould dislodge an existing bill from a committee and send it tothe House floor if a simple majority of lawmakers in the chambersign the petition.

Such a move would take a week or so to clear proceduralhurdles in the House, according to Democratic U.S.Representative George Miller. A House vote might not come untilat least Oct. 14, which is a federal holiday, said Miller fromCalifornia.

Democratic Representative Louise Slaughter of New Yorkcalled on 22 moderate House Republicans to put their "votingcards where your mouths are" and help end the shutdown.

Slaughter said that although the 22 have declared supportfor an unconditional bill to fund the government, they havesided with their own Republican leaders and the conservative TeaParty wing in repeatedly opposing Democratic efforts to bringsuch a Senate bill up for a House vote.

"When the opportunity arose, courage failed them," Slaughtersaid in a House speech.

In light of the stalemate, Obama has canceled plans for avisit to a number of Asian countries next week.

The government was obliged to close many of its operationsbecause Congress failed to pass a spending bill by Oct. 1, thestart of the new fiscal year.

Facing public anger over the government shutdown, the Househas adopted a strategy of voting piecemeal to fund some popularfederal agencies - like the Veterans Administration, theNational Park Service and the National Institutes of Health -that are partially closed.

Republicans know that neither the Democratic-controlledSenate nor Obama will agree to that approach, but it allows themto accuse Democrats of working against the interests ofveterans, national parks and cancer patients.

"PIECEMEAL" FUNDING BILLS

House Republicans have been working through nearly a dozenbills to fund targeted programs. They included: nutritionprograms for low-income women and their children; a program tosecure nuclear weapons and non-proliferation; intelligencegathering; border patrols; weather monitoring; Head Start schoolprograms for the poor. With a major storm approaching the Gulfcoast, one of the measures passed by the House on Friday wouldfund federal disaster assistance.

The Democratic-controlled Senate says it will reject thepiecemeal funding measures and Obama has said he would vetothem. One measure the White House does support is a bill toretroactively pay federal workers once the government reopens,likely to pass the House on Saturday.

Global stocks posted a loss for the week while the dollarhovered near an eight-month low on investor fears the budgetstandoff in Washington will drag on until politicians reach adeal to raise the U.S. debt ceiling.

The shutdown and the possible failure to raise the debtceiling, have prompted a number of warnings from big business.

AT&T Chief Executive Randall Stephenson, addressing apossible default, said in a statement, "It would be the heightof irresponsibility for any public official to consider such acourse. In fact, even the discussion of default poses great riskto our economy and to our country."

The government's September employment report, the mostwidely watched economic data both on Wall Street and MainStreet, had been scheduled for release on Friday but was acasualty of the shutdown.

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