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Obama presses Boehner to end shutdown as deadlock continues

Richard Rubin, Roxana Tiron and Lisa Lerer

Published: Thursday, Oct. 3 2013 12:08 p.m. MDT

House Speaker John Boehner, R-Ohio, speaks to reporters following a meeting with President Barack Obama at the White House in Washington, Wednesday, Oct. 2, 2013.

Manuel Balce Ceneta, Associated Press

WASHINGTON — President Barack Obama said Thursday there is only "one way out" of the partial government shutdown that has entered its third day — for House Speaker John Boehner to allow a vote on a stopgap spending bill without conditions.

Obama, speaking a day after meeting with Boehner and other congressional leaders at the White House, again criticized the tea party-backed faction of House Republicans who insist on tying government funding to delaying a major part of Obama's 2010 health-care law.

"Take a vote, stop this farce and end this shutdown right now," he said at a construction company in Rockville, Md., just outside of Washington. "If you're being disrespected, it's because of that attitude you've got, that you deserve to get something just for doing your job."

The Oval Office meeting Wednesday failed to break the logjam as both sides reiterated the points they've been making for days, raising the prospect of a prolonged shutdown and merging the standoff over the government shutdown with raising the U.S. debt limit.

Democrats, including Obama, say Republicans must end the shutdown and raise the debt ceiling as a precondition to talks on broader budgetary disputes. Republicans want to use the fiscal deadlines to extract changes to Obama's health-care law.

House Republicans, looking for a strategy, plan to advance a debt-limit bill while the government is shuttered, resurrecting an approach that includes a long list of party priorities, according to a Republican lawmaker and two leadership aides who asked for anonymity to discuss the strategy. Party leaders plan a meeting for tomorrow at 10 a.m.

House Majority Leader Eric Cantor of Virginia told reporters Thursday that he wants to negotiate the spending bill and the debt limit together. He didn't provide details on when Republicans will introduce a measure to raise the debt ceiling.

"I find it unbelievable that the president would call Speaker Boehner and others to the White House just to let them know he wouldn't negotiate," Cantor said.

Democrats said Boehner should allow a vote on funding the government and rely on promised support from Democrats and a group of House Republicans willing to accept a funding extension through Nov. 15 at the spending levels Republicans prefer.

Cantor questioned whether Democrats would actually vote for such a plan.

Markets should be concerned about the possibility of default, Obama said on CNBC Wednesday after meeting with chief executives of financial-services companies, including Lloyd Blankfein of Goldman Sachs and Brian Moynihan of Bank of America.

"This isn't happening because of some financial crisis," Obama said Thursday. "It's happening because of a reckless Republican shutdown in Washington."

Failure to raise the debt limit has "the potential to be catastrophic," the Treasury Department said in a report Thursday that said credit markets could freeze and the value of the dollar could plummet. The government will exhaust its borrowing authority by Oct. 17 and have only cash after that.

Obama reiterated his unwillingness to negotiate on a short-term spending bill or the debt ceiling.

The partial shutdown put about 800,000 federal employees out of work and shuttered many government functions.

The Labor Department said it wouldn't release Friday's unemployment report. A citizen's privacy board investigating whether U.S. spy programs have infringed on the rights of Americans has postponed a public hearing scheduled for Friday due to the partial government shutdown.

The National Transportation Safety Board isn't going to the scene of a bus crash in Tennessee that killed eight people because its highway investigators are furloughed. A NTSB spokeswoman told NBC the agency probably would have responded if the government wasn't shut down.

U.S. efforts to enforce sanctions against Iran are being hurt because of furloughs at the Treasury Department, Undersecretary of State for Political Affairs Wendy Sherman said.

Other services, such as air-traffic control and Social Security benefits, were operating.

A one-week partial shutdown would probably shave 0.1 percentage point from economic growth, according to the median estimate of economists surveyed by Bloomberg, with the costs accelerating if the closing persists.

As the stalemate wears on, both sides are grasping for political leverage.

House leaders proposed five bills Wednesday to reopen specific parts of the government. They picked politically popular agencies, forcing Democrats to choose between their party's position against a piecemeal approach and specific programs they support.

The bills would reopen national parks, provide funding for the National Institutes of Health, let Washington's city government spend its own money, fund the Department of Veterans Affairs and pay National Guard and Reserve forces. The Washington, parks and NIH bills passed Wednesday with bipartisan support. The other measures were scheduled for votes Thursday.

"While we work out our differences here in Washington, children should not be denied the treatment," Cantor said.

Senate Democrats said they wouldn't pick and choose federal agencies to reopen, and the White House issued veto threats against all the bills.

Democrats, meanwhile, tried to take advantage of the split among House Republicans. The party is divided between hard- liners aligned with Sen. Ted Cruz of Texas who are seeking concessions on the health law and others who back a bill to reopen the government without conditions.

At least 20 Republicans have said they would support the Senate-passed plan. They haven't aligned with Democrats on procedural votes to force Boehner's hand.

Unlike past fiscal feuds, this dispute is more about the health law than the amount of government spending. Democrats say they have already made a concession by accepting spending levels set under the across-the-board cuts known as sequestration, which went into effect earlier this year and were part of the deal to avoid a 2011 default.

The U.S. budget deficit in June was 4.3 percent of gross domestic product, down from 10.1 percent in February 2010 and the narrowest since November 2008, when Obama was elected to his first term, according to data compiled by Bloomberg from the Treasury Department and the Bureau of Economic Analysis.

Republican governors said they are stepping up efforts to emphasize their work against the backdrop of the shutdown.

"We are not going to allow the Republican Party to be defined by the dysfunction in Washington," Gov. Bobby Jindal of Louisiana, chairman of the Republican Governors Association, said in a statement Thursday. "Republican governors are amassing great results outside the Beltway."

_ With assistance from Jeanna Smialek, Alexandre Tanzi, Leslie Hoffecker, Kasia Klimasinska, Chris Strohm, Kathleen Hunter, Michael C. Bender and Terry Atlas in Washington.

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