Questions Swirl About Debt Limit as Gov’t Shutdown Continues

Posted at 4:25 AM, Oct 04, 2013
and last updated 2013-10-04 04:26:25-04

WASHINGTON (CNN) — U.S. foreign policy takes the latest hit as the government shutdown enters it’s fourth day.

With his focus on the brewing domestic crisis, the White House canceled President Barack Obama’s trip to the Asia-Pacific Economic Cooperation summit in Bali, Indonesia.

“The president made this decision based on the difficulty in moving forward with foreign travel in the face of a shutdown, and his determination to continue pressing his case that Republicans should immediately allow a vote to reopen the government,” a statement from the White House said.

Secretary of State John Kerry will lead the U.S. delegation in Asia.

Debt limit breakthrough?

The president’s bow from APEC comes as House Speaker John Boehner reportedly told fellow GOP legislators that he will rely on Democrats to pass a measure to raise the nation’s debt limit.

A House member shared the information with CNN after attending a meeting with Boehner on Wednesday. The lawmaker requested anonymity because the gathering was private.

Congressional Republicans remain divided on how to structure legislation to raise the government’s borrowing level. And an aide to the House speaker downplayed the development, saying, “Boehner has always said the United States will not default on its debt, so that’s not news.”

Still, at least one Democrat — Sen. Charles Schumer of New York — cheered the prospect of the GOP leader refusing to block at least this measure that President Barack Obama and his fellow Democrats strongly support.

“This could be the beginnings of a significant breakthrough,” Schumer said in a statement. “Even coming close to the edge of default is very dangerous, and putting this issue to rest significantly ahead of the default date would allow everyone in the country to breathe a huge sigh of relief.”

The potential breakthrough — at least on the debt limit — came two weeks before the government is set to run out of money to cover its roughly $16.7 trillion debt. If the debt ceiling isn’t bumped up, the country goes into default.

Conservative Republicans want budget cuts in exchange for upping the credit limit.

Boehner wrote this week in USA Today that “there is no way Congress can or should pass (a debt ceiling hike) without spending cuts and reforms to deal with the debt and deficit and help get our economy moving again.”

He accused the president of refusing to negotiate; Obama and fellow Democratic leaders have since said they are open to talks on any and all budgetary matters, but only after the government is reopened.

Obama challenges Boehner to allow ‘yes-or-no vote’ on shutdown

While Boehner’s comments suggest hope toward some common resolution on the debt ceiling, the government shutdown is another matter entirely.

The two sides appeared no closer to an agreement on Thursday. In fact, they appeared to dig in — insisting their approach is best and that the other was to blame for the government furloughs, the shuttering of national parks, the loss of funding for various programs and the other effects of the shutdown.

The conservative tea party wing of the GOP is demanding that any spending measure include provisions to dismantle or defund Obamacare, which became law in 2010 and was upheld by the Supreme Court last year.

The president again on Thursday called the strategy “reckless.”

The president said a spending initiative passed by the Democratic-led Senate that leaves his signature healthcare legislation out of the equation would pass the House with support from Democrats and some Republicans, except that Boehner won’t allow the vote.

“The only thing that is keeping the government shut down, 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’s 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 was part of the Democratic chorus Thursday, accusing Boehner of reneging on an agreement to let the House vote on a “clean” spending package of $988 billion, $70 billion less than Democrats wanted). Boehner went back on that deal, Reid surmised in an interview with CNN’s Dana Bash, because he feared fellow Republicans would turn on him and oust him from his position as House speaker.

“His job is not as important as our country,” Reid said. “… He has to have some courage.”

Cantor: GOP should stand its ground

GOP Rep. Michael Grimm said Thursday night that “very, very arrogant and very obstinate” remarks by Reid and what he calls a lack of needed leadership from Obama undermines the chances of reaching a deal.

“If you’re going to be insulted …, and if you’re going to be spoken down to, and there’s going to be this air of arrogance, you’re only going to make things worse,” Grimm, of New York, told CNN’s Anderson Cooper.

While Grimm and a few other moderate Republicans have backed a “clean” spending bill without anti-Obamacare provisions, some of his colleagues in the House say the party won’t budge from their strategy. Rep. Tim Huelskamp of Kansas, for one, described his caucus as “very unified” and said Reid and Obama are “confused” if they think “we’re going to fold and let them win on everything.”

In fact, House Majority Leader Eric Cantor wrote in a memo that it’s the positions of Obama and other Democrats that are “untenable.”

House Republicans would continue passing piecemeal funding measures for popular programs such as veterans affairs, national parks and medical research to keep up pressure on Senate Democrats who refuse to consider such measures in the ongoing stalemate, Cantor’s memo said.

Proposal from moderates

Meanwhile, two moderate House members — one Republican and one Democrat — proposed a compromise Thursday that would fund the government for six months while eliminating a tax on medical devices in the health care reforms.

Senate Democrats quickly rejected the idea because it would link the health care reform provision to the need to fund the government now while extending deep mandatory budget cuts they oppose for half of the new fiscal year.