Representative Eric Cantor of Virginia, the House majority leader, called yesterday’s meeting with Obama “constructive” and that, with talks continuing, “hopefully we will have a clearer way, path forward.”
Obama began the meeting by acknowledging that Republican leaders’ offer to extend the debt limit was a positive step while urging them to stop the shutdown, according to a Democratic official who asked not to be identified discussing the closed-door deliberations.
The Republican lawmakers responded by saying that they needed concessions, the official said. Obama said he would consider what they want so long as they weren’t making demands as a condition for a spending bill that would allow federal agencies to resume operations.
Senator Ron Johnson, a Wisconsin Republican, said at a Bloomberg breakfast today that lawmakers were using the debt ceiling for leverage because “how else can you get those people -- the president, Democrats in the Senate and the House -- to come to the table and start working with you in good faith to solve a long-term problem?”
Obama “would like the shutdown stopped,” Representative Hal Rogers, a Kentucky Republican, said after the White House session. “We are trying to find out what it is he would insist upon” in a spending measure to open the government.
The meeting was “very positive” and “a lot of air was cleared,” another participant, Representative Howard “Buck” McKeon of California, chairman of the Armed Services Committee, said today on MSNBC. “At the end of the day, we’re going to get this worked out.”
White House Chief of Staff Denis McDonough and Deputy Chief of Staff Rob Nabors were taking the lead in last night’s talks with House Republican aides, the Democratic official said.
Standard & Poor’s 500 Index futures slipped 0.1 percent today after the gauge yesterday rose the most since Jan. 2.
Rates on Treasury bills scheduled to mature on Oct. 17 dropped yesterday for the first time in six days. The benchmark 10-year Treasury yield rose two basis points, or 0.02 percentage point, to 2.68 percent, after touching 2.72 percent, the highest level since Sept. 23.
The financial markets, which have weathered fiscal brinkmanship at least four times since Republicans gained the House majority in January 2011, so far have taken Washington’s dysfunction in stride. Treasury Secretary Jacob J. Lew warned in testimony to lawmakers yesterday that “uncertainty” over the debt limit is starting to stress financial markets.
Under Boehner’s plan, the Treasury Department wouldn’t be able to use so-called extraordinary measures to further extend borrowing authority, creating a hard deadline, said Representative Tom Reed, a New York Republican.
House Minority Leader Nancy Pelosi of California said ending the extraordinary measures “isn’t very smart” because it would limit Treasury’s flexibility.
If the U.S. fails to raise the debt limit by Oct. 17, the government will have $30 billion plus incoming revenue to pay its bills. It would start missing scheduled payments, including benefits, salaries and interest, between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.