Officials see end of US fiscal crisis

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WASHINGTON, D.C.: A glimmer of hope for a breakthrough flickered on Friday in the fiscal impasse, which has crippled Washington and threatened serious damage to the global economy.

After more than a week of deadlock, something positive emerged on Thursday when Republicans offered President Barack Obama a short term extension of the United States (US) government’s borrowing authority, so as to stave off a possible debt default.

In the process, they spurred a bumper day on Wall Street and Asia reacted well on Friday, too. Shares in Tokyo rose 1.48 percent, and stocks were also up in Sydney, Seoul and Hong Kong and elsewhere.

Signs of movement coincided with a new poll showing Americans have developed a sharply negative view of congressional Republicans during a crisis, which has also partially shuttered the US government since October 1.


Republican leaders presented their plan to President Barack Obama at the White House—and in a departure from recent bad tempered encounters, both sides described the meeting as useful and constructive.

The White House said Obama would be open to the Republican proposal for a six-week extension to the $16.7 trillion debt ceiling—though would prefer longer.

The sticking point appears to lie in the Republican Party’s request for Obama to open talks on a budget deal as a condition for reopening the government.

Obama says he will only discuss long-term budget issues once the government returns to work and hundreds of thousands of federal employees are back at their desks.

After 90 minutes of talks at the White House, House Republican Party second in command Eric Cantor offered an unusually upbeat assessment to reporters.

“It was a very useful meeting, we had a constructive conversation,” Cantor said, adding that both sides would consider their positions and get back together to talk into the night leading from Thursday into Friday.

The White House, sensing victory and keen to drive a hard bargain, was more measured, making clear that Obama was still seeking a deal that would both reopen the government and extend the debt ceiling.

“After a discussion about potential paths forward, no specific determination was made,” a statement said.

“The President looks forward to making continued progress with members on both sides of the aisle.”

For the first time, it seemed that both sides were seeking an end to the crisis, which even led to the suspension of death benefits to families of soldiers killed on duty.

House Budget Committee chairman Paul Ryan, the Republican vice presidential nominee in 2012 and a key figure in any upcoming deal on broader fiscal issues, sounded encouraged that the two sides were into the nitty-gritty of negotiations, even though the meeting was inconclusive.

“He didn’t say no, he didn’t say yes,” Ryan said of Obama’s reaction to the Republican offer.

Senate Republicans are due to meet with Obama on Friday.

“There is a light at the end of the tunnel here,” Republican Senator Rob Portman said.

On Thursday, Obama signed into law a bill reinstating the payments, marking the end of a deeply embarrassing development for the administration, feuding lawmakers and the Pentagon.

The Senate passed the mini funding bill by unanimous consent earlier in the day, following approval by the House of Representatives on Wednesday.

Obama demanded urgent congressional action as the plight of four families who lost loved ones in Afghanistan grabbed headlines, sparking public outrage.

“What I think we did here was the right thing to do,” said Senator Dick Durbin, a Democrat whose party has vehemently opposed the Republican strategy of passing piecemeal funding bills to open certain parts of the government.

“We are trying to put out these little fires, spare the American people of the pain and injustice that’s coming about as a result of this shutdown.”

Since October 1, when the shutdown began due to a bitter budget impasse, 29 troops have been killed, according to the Pentagon.

As of Wednesday, none of their families had received the funds.

Fisher House Foundation, a private charity devoted to helping combat veterans, had agreed to finance the death benefits. The Pentagon will reimburse the group once government funding is restored.

Defense Secretary Chuck Hagel expressed disgust that political deadlock in Congress had forced the extraordinary step.

“I am offended, outraged and embarrassed that the government shutdown had prevented the Department of Defense from fulfilling this most sacred responsibility in a timely manner,” he said.

The White House has accused Republicans of causing the problem by shutting down federal operations with a failure to pass a new budget before October 1, and for not including the provision in a bill signed by Obama to ensure soldiers on deployment still get paid during the stalemate.

Republican lawmakers in turn blamed the president and his fellow Democrats for the shutdown and for the suspension of death benefit payments.

Relatives of soldiers killed on the battlefield abroad or on duty at home are normally entitled to $100,000 in death benefits to cover housing allowances, as well as costs for the burial and dignified transfer of remains.

With Washington bickering over the budget, Hagel traveled Wednesday to Dover Air Force Base in Delaware to pay his respects to four soldiers killed this week in Afghanistan.

AFP

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