Recession Risk
“If there is that degree of disruption, that lack of certainty, that lack of trust in the U.S. signature, it would mean massive disruption the world over,” Lagarde said in an interview on NBC’s “Meet the Press” program about the impact of not raising the borrowing limit. “And we would be at risk of tipping, yet again, into recession.”
McConnell, in a statement yesterday, urged Democratic leaders to support a plan, based on one drafted by Republican Susan Collins of Maine, which Democrats rejected Oct. 12.
Polls show the public is putting most of the blame for the 14-day partial government shutdown on Republicans.
“I think we’ll solve this problem over the next few days, and I think today may be a very good day,” Senator Bob Corker, a Tennessee Republican, said today on MSNBC’s “Morning Joe” program. “All of us now are talking about spending, which is where we should have been in the first place.”
Collins’s group of 12 senators seeking to frame an accord planned to resume their discussions at 9 a.m. today, said a Senate Democratic aide with knowledge of the negotiations, who spoke on condition of anonymity.
Resolution Soon
“It’s taken far too long, we never should be in this situation, but I do believe we are going to see a resolution this week,” Collins said yesterday on CNN’s “State of the Union.”
Six senators working with Collins -- Democrats Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota, Mark Pryor of Arkansas, Amy Klobuchar of Minnesota and Joe Donnelly of Indiana and independent Angus King of Maine -- yesterday said they don’t support the proposal in its current form.
“Productive, bipartisan discussions” have taken place, “but there is no agreement,” the senators said in a statement.
President Barack Obama, in a phone call with House Minority Leader Nancy Pelosi of California, “reinforced that there must be a clean debt limit increase” -- and a stopgap spending measure also free of policy add-ons -- before budget negotiations can begin, according to a White House statement.
$70 Billion
The Senate negotiations include discussions of easing the spending caps imposed by the across-the-board cuts known as sequestration. Richard Durbin of Illinois, the second-ranking Democrat in the Senate, said there is a $70 billion spending gap between Democrats and Republicans.
Democrats don’t want to lock in lower spending levels for most of the 2014 fiscal year, which began Oct. 1. They have been willing to accept the lower numbers through Nov. 15.
Disagreement over spending is the big sticking point, said Jim Manley, a former aide to Reid. Manley, in a telephone interview, said he’s watching “to see if Senator McConnell demands some sort of fig leaf from Senator Reid to protect the speaker or whether he’s prepared to throw him overboard to get this all behind him.”
Time is running short for the Senate to pass any agreement and for the House to act on it before Oct. 17, when U.S. borrowing authority lapses. The federal government would start missing payments sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
