Obama and other Democrats have insisted that they won’t negotiate on policy conditions attached to the debt limit. By making that their hard-line position and warning of the consequences of default, they opened the door to a shorter-term debt-limit increase.
“We’re not going to vote against making sure that America pays its bills,” Representative Steny Hoyer of Maryland, the second-ranking Democrat in the House, said after leaving a meeting with Obama yesterday. “We think it ought to be longer- term.”
The Standard & Poor’s 500 Index rose 1.4% at 10:05 a.m. in New York on optimism among some traders that a deal is closer. Rates on Treasury bills due Oct. 17 dropped for the first time in six days, declining 15 basis points to 0.333% at 9:47 a.m. New York time, according to Bloomberg Bond Trader prices. The benchmark 10-year yield rose five basis points, or 0.05 percentage point, to 2.71%, the highest level since Sept. 23.
Jason Furman, director of the White House Council of Economic advisers, declined to comment on the idea of extending the debt limit without resolving government funding.
“I’m not going to answer every single hypothetical,” he said today at the Center for American Progress in Washington.
Meanwhile, Senate Democrats will press ahead with their preferred plan, which would push the next debt-limit fight into 2015 and include no policy conditions.
Senate Majority Leader Harry Reid is confident he can muster the needed 60 votes to advance the bill in an initial Oct. 12 test vote, said a Senate Democratic aide. Reid’s long- term bill, which could reach the House on Oct. 16, may put pressure on Boehner, an Ohio Republican, to act.
Reid must gain support from at least six Republicans. One way to do that would be to promise votes on Republican-backed amendments that Democrats could defeat, the aide said. A second vote with a 60-vote threshold would be required.
Republican leaders have been meeting with party members to talk about ideas. Representative Paul Ryan, a Wisconsin Republican and chairman of the House Budget Committee, advocates starting broader budget negotiations with Democrats.
“Within the Republican caucus, there’s no agreement, and this is the challenge we’ve had all along,” Representative Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, said today on MSNBC’s “Morning Joe” program.
Van Hollen said lawmakers “shouldn’t be tying raising the debt ceiling to any specific demand.” Still, he said, “we welcome the opportunity to have a discussion on the budget.”
The shutdown and debt-limit debate have hurt Republicans’ standing with voters, according to a Gallup poll released yesterday. It found that 28% of Americans view the party favorably, down 10 percentage points since September and at the lowest point since Gallup began asking the question in 1992.
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