Updated Oct. 9, 2013 1:08 p.m. ET
WASHINGTON—President Barack Obama on Wednesday set meetings with Republican and Democratic lawmakers to discuss how to break the standoff over raising the U.S. borrowing limit and end a partial government shutdown that began nine days ago.
The White House said Mr. Obama will huddle with House Democrats on Wednesday afternoon. A senior GOP aide said the president will meet with House Republicans lawmakers on Thursday. Mr. Obama is also expected to meet with senators.
The sessions come as Congress and the White House remain bitterly divided on how to end an impasse over government funding and raising a cap on borrowing, which the U.S. Treasury says it needs soon to keep paying all its bills. In a blunt acknowledgment that no end to the impasse is in sight, both chambers of Congress are expected to be in session this weekend.
On Tuesday, both sides dug deeper into their positions. Mr. Obama warned of "economic chaos" if a political stalemate causes the U.S. to no longer be able to pay its bills, and said he would accept even a short-term increase in the borrowing limit to give lawmakers time to negotiate.
House Speaker John Boehner (R., Ohio) quickly shot down the idea of a short-term reprieve that excludes Republican priorities, saying any increase in the nation's statutory borrowing limit must be paired with deficit-reduction measures.
"What the president said today was, if there's unconditional surrender by Republicans, he'll sit down and talk to us," Mr. Boehner said after Mr. Obama held a news conference at the White House on Tuesday.
In an opinion piece in The Wall Street Journal's Wednesday edition, House Budget Chairman Paul Ryan (R., Wis.), sketched out a framework he said could end the stalemate and lead to broad negotiations to further tackle the nation's large fiscal deficit.
"So let's negotiate an agreement to make modest reforms to entitlement programs and the tax code," Mr. Ryan said. "This is our moment to get a down payment on the debt and boost the economy."
Absent from Mr. Ryan's piece was a suggestion that the White House and Congress revisit the 2010 health-care law, a demand by Republicans that led to the government shutdown. Republicans in recent days have shifted their focus away from the health law to pressing for a new round of budget negotiations.
With the government hovering close to the $16.7 trillion debt limit, Senate Majority Leader Harry Reid (D., Nev.) on Wednesday called again for Congress to increase the U.S. borrowing limit, ahead of his expected moves to set up the first votes on Saturday.
"Default would put our economy in grave danger," Mr. Reid said on the Senate floor. "Republicans and Democrats may have our differences, but neither side should hold the full faith and credit of the United States hostage," he added.
Mr. Reid on Wednesday formally called all 100 senators to the Senate floor, as he did yesterday, to spotlight introduction of a bill to raise the debt ceiling for a year. The Senate is expected to vote on the measure in the coming days, but it lacks Republican support.
After the Senate is assembled, Senate Budget Chairman Patty Murray (D., Wash.) was expected to call for appointment of conference committee negotiators to resolve House and Senate differences on the budget. Ms. Murray has sought to do so many times over the past five months since the Senate passed its budget.
Republicans have blocked appointment of conferees because they said they did not want negotiations to begin until the parties were closer to having an agreement.
The Republican-led House has pursued its own legislation, including a bill approved late Tuesday to create a bipartisan team of negotiators from the House and Senate to set terms for raising the borrowing limit. The panel is instructed to set levels for annual appropriations, also known as discretionary spending, as well as recommend "reforms" in entitlement programs.
Mr. Obama has rejected the idea, saying the instructions meant the committee would consider Republican spending-cut proposals without Democratic ideas for raising revenue.
The standoff prompted financial regulators to talk via phone Tuesday to discuss the government shutdown and the potential impact of a debt-limit breach, a Treasury spokesman said.
The Financial Stability Oversight Council, which includes the Federal Reserve, banking and markets agencies, is monitoring effects of a possible U.S. default on short-term lending markets, including repurchase agreements and money-market mutual funds, according to a person familiar with the matter.
Financial markets are increasingly showing signs of stress as the standoff continues. The Dow Jones Industrial Average slid 159.71 points Tuesday, or 1.1%, to 14776.53, its lowest close since Aug. 27 and its 11th drop in 14 trading sessions.
The Chicago Board Options Exchange's Volatility Index—the stock market's "fear gauge"—jumped to its highest level this year and the rate the government pays to borrow for a month rose to its highest level in five years, following a $30 billion Treasury bill auction that was deemed "awful" by Bank of America Merrill Lynch's Priya Misra , the firm's head of U.S. rates-strategy research.
Mr. Obama on Tuesday said the Treasury is exploring contingency plans for possibly prioritizing payments if the U.S. borrowing limit is exceeded.
He drew a dire picture of the consequences of failing to raise the debt ceiling, saying that "every American could see their 401(k)s and home values fall, borrowing cost for mortgages and student loans rise, and there would be a significant risk of a very deep recession."
—Siobhan Hughes contributed to this article.
Write to Carol E. Lee at [email protected], Janet Hook at [email protected] and Jared A. Favole at [email protected]
WASHINGTON—President Barack Obama on Wednesday set meetings with Republican and Democratic lawmakers to discuss how to break the standoff over raising the U.S. borrowing limit and end a partial government shutdown that began nine days ago.
The White House said Mr. Obama will huddle with House Democrats on Wednesday afternoon. A senior GOP aide said the president will meet with House Republicans lawmakers on Thursday. Mr. Obama is also expected to meet with senators.
The sessions come as Congress and the White House remain bitterly divided on how to end an impasse over government funding and raising a cap on borrowing, which the U.S. Treasury says it needs soon to keep paying all its bills. In a blunt acknowledgment that no end to the impasse is in sight, both chambers of Congress are expected to be in session this weekend.
On Tuesday, both sides dug deeper into their positions. Mr. Obama warned of "economic chaos" if a political stalemate causes the U.S. to no longer be able to pay its bills, and said he would accept even a short-term increase in the borrowing limit to give lawmakers time to negotiate.
House Speaker John Boehner (R., Ohio) quickly shot down the idea of a short-term reprieve that excludes Republican priorities, saying any increase in the nation's statutory borrowing limit must be paired with deficit-reduction measures.
"What the president said today was, if there's unconditional surrender by Republicans, he'll sit down and talk to us," Mr. Boehner said after Mr. Obama held a news conference at the White House on Tuesday.
In an opinion piece in The Wall Street Journal's Wednesday edition, House Budget Chairman Paul Ryan (R., Wis.), sketched out a framework he said could end the stalemate and lead to broad negotiations to further tackle the nation's large fiscal deficit.
"So let's negotiate an agreement to make modest reforms to entitlement programs and the tax code," Mr. Ryan said. "This is our moment to get a down payment on the debt and boost the economy."
Absent from Mr. Ryan's piece was a suggestion that the White House and Congress revisit the 2010 health-care law, a demand by Republicans that led to the government shutdown. Republicans in recent days have shifted their focus away from the health law to pressing for a new round of budget negotiations.
With the government hovering close to the $16.7 trillion debt limit, Senate Majority Leader Harry Reid (D., Nev.) on Wednesday called again for Congress to increase the U.S. borrowing limit, ahead of his expected moves to set up the first votes on Saturday.
"Default would put our economy in grave danger," Mr. Reid said on the Senate floor. "Republicans and Democrats may have our differences, but neither side should hold the full faith and credit of the United States hostage," he added.
Mr. Reid on Wednesday formally called all 100 senators to the Senate floor, as he did yesterday, to spotlight introduction of a bill to raise the debt ceiling for a year. The Senate is expected to vote on the measure in the coming days, but it lacks Republican support.
After the Senate is assembled, Senate Budget Chairman Patty Murray (D., Wash.) was expected to call for appointment of conference committee negotiators to resolve House and Senate differences on the budget. Ms. Murray has sought to do so many times over the past five months since the Senate passed its budget.
Republicans have blocked appointment of conferees because they said they did not want negotiations to begin until the parties were closer to having an agreement.
The Republican-led House has pursued its own legislation, including a bill approved late Tuesday to create a bipartisan team of negotiators from the House and Senate to set terms for raising the borrowing limit. The panel is instructed to set levels for annual appropriations, also known as discretionary spending, as well as recommend "reforms" in entitlement programs.
Mr. Obama has rejected the idea, saying the instructions meant the committee would consider Republican spending-cut proposals without Democratic ideas for raising revenue.
The standoff prompted financial regulators to talk via phone Tuesday to discuss the government shutdown and the potential impact of a debt-limit breach, a Treasury spokesman said.
The Financial Stability Oversight Council, which includes the Federal Reserve, banking and markets agencies, is monitoring effects of a possible U.S. default on short-term lending markets, including repurchase agreements and money-market mutual funds, according to a person familiar with the matter.
Financial markets are increasingly showing signs of stress as the standoff continues. The Dow Jones Industrial Average slid 159.71 points Tuesday, or 1.1%, to 14776.53, its lowest close since Aug. 27 and its 11th drop in 14 trading sessions.
The Chicago Board Options Exchange's Volatility Index—the stock market's "fear gauge"—jumped to its highest level this year and the rate the government pays to borrow for a month rose to its highest level in five years, following a $30 billion Treasury bill auction that was deemed "awful" by Bank of America Merrill Lynch's Priya Misra , the firm's head of U.S. rates-strategy research.
Mr. Obama on Tuesday said the Treasury is exploring contingency plans for possibly prioritizing payments if the U.S. borrowing limit is exceeded.
He drew a dire picture of the consequences of failing to raise the debt ceiling, saying that "every American could see their 401(k)s and home values fall, borrowing cost for mortgages and student loans rise, and there would be a significant risk of a very deep recession."
—Siobhan Hughes contributed to this article.
Write to Carol E. Lee at [email protected], Janet Hook at [email protected] and Jared A. Favole at [email protected]