Republicans Enter Talks With Obama on Debt Limit Increase

WASHINGTON (Oct 11)  President Barack Obama and House Republican leaders were moving toward an agreement to extend the nation’s borrowing authority even as they remained at odds over terms for ending the partial government shutdown.

They met for 90 minutes at the White House yesterday after House Speaker John Boehner of Ohio said he would offer a measure to postpone a potential U.S. default to Nov. 22 from Oct. 17, a step back from the brink that was enough to trigger the biggest rise in U.S. stocks in nine months.

The developments were the first sign that the president and House Republican leaders could resolve the fiscal impasse without negative economic consequences from a default as the halt in government operations moved into its 11th day.

Any prospective deal faces many questions, including whether Boehner can reach an agreement without losing the support of his members who are backed by the limited-government Tea Party. They’ve sought to use the debt ceiling and partial government shutdown to force curbs to Obamacare and federal spending cuts.

Obama didn’t accept or reject House Republicans’ plan for a short-term increase in the debt limit, and the two sides planned further talks among their staff members last night to address the president’s insistence that Republicans agree to fund the government before starting broader fiscal talks.

“No specific determination was made,” the White House said in a statement. The two sides talked about “potential paths forward.”

‘Path Forward’

Representative Eric Cantor of Virginia, the House majority leader, called the meeting “constructive” and that with talks continuing overnight “hopefully we will have a clearer way, path forward.”

Obama began the meeting by acknowledging that Republican leaders’ offer to extend the debt limit was a positive step while urging them to open the government, according to a Democratic official who asked not to be identified discussing the closed-door deliberations.

The Republican lawmakers responded by saying that they needed concessions in order to do so, the official said. Obama said that while he would consider what they want, nothing would be delivered in exchange for a spending bill that would allow federal agencies to resume operations.

Obama “would like the shutdown stopped,” Representative Hal Rogers, a Kentucky Republican, said after the White House session. “We are trying to find out what it is he would insist upon” in a spending measure to open the government.

Market Reaction

White House Chief of Staff Denis McDonough and Deputy Chief of Staff Rob Nabors were taking the lead in last night’s talks with House Republican aides, the Democratic official said.