WASHINGTON - US Republicans have proposed a six-week extension to the debt ceiling to stave off default.
House of Representatives Speaker John Boehner said they would do so in exchange for negotiations with the White House to end a government shutdown that took effect on 1 October.
Boehner said the measure would advance if President Barack Obama agrees to negotiate over reopening the government and to "start to deal with America's pressing problems".
According to AP, White House spokesman Jay Carney said that Obama "would likely sign" a clean bill increasing the debt cap but that the president also wants Republicans to reopen the government.
He did not rule out Obama agreeing to Boehner's debt ceiling proposal if the government remains closed, but the White House made no promises that Obama would hold negotiations under those circumstances.
"He will not pay ransom in exchange for the Republicans in the House doing their job," Carney said.
House Republicans haven't specified what they plan to tie to the measure and Carney said the White House would need to see a bill before accepting it, said Bloomberg.
"The president is happy that cooler heads at least seem to be prevailing in the House, that there at least seems to be a recognition that default is not an option," Carney said.
Boehner's plan marks the first sign that the parties may be able to resolve the impasse without the catastrophic economic consequences that the Treasury Department said would stem from a default.
It wouldn't end the partisan budget fights that have led to fiscal brinkmanship at least four times since Republicans took over the House in January 2011.
"It's time for leadership," Boehner, an Ohio Republican, told reporters in the Capitol
Thursday. "It's time for these negotiations and this conversation to begin." Obama is to meet with Boehner and other House GOP leaders at the White House Thursday afternoon.
Obama, a Democrat, has said consistently that Republicans must reopen the government and prevent the threat of a first-ever government default before he will negotiate over the budget and other conditions Republicans have sought.
Boehner also said he would appoint House negotiators to try to sort out differences between vastly different House- and Senate-passed budget blueprints.
Officials have warned the US risks default on 17 October if the nation's borrowing limit is not increased.
Boehner told reporters on Thursday: "What we want to do is to offer the president today the ability to move a temporary increase in the debt ceiling in agreement to go to conference on the budget for his willingness to sit down and discuss with us a way forward to reopen the government."
After weeks of decline, financial market indexes shot higher in anticipation of a possible deal that could avert a federal financial default. Both the Dow Jones industrial average and Standard Poor's 500 index were up well over 1 percent in afternoon trading
"I would hope the president would look at this as an opportunity and a good faith effort on our part to move halfway, halfway to what he's demanded, in order to have these conversations begin," Boehner, R-Ohio, told reporters after presenting the plan to rank-and-file GOP lawmakers.
Boehner produced his proposal as the shutdown entered its 10th day. On that front, the administration said it would allow states to use their own money to reopen some national parks that have been closed, said AP.
Governors in at least four states Utah, South Dakota, Arizona and Colorado have asked for authority to reopen national parks within their borders because of the economic impact of the closures.
Earlier, Treasury Secretary Jack Lew told a congressional panel that skipping a payment on US debt would trigger a potentially profound financial crisis.
"It would be chaos," Lew told the Senate hearing.
Since the US hit its debt ceiling in May, the Treasury has been using what are called extraordinary measures to keep paying the bills, but those methods will be exhausted by 17 October, Lew has said.
The senior Republican on the panel, Senator Orrin Hatch, accused the Obama administration of "an apparent effort to whip up uncertainty in the markets".
But International Monetary Fund chief Christine Lagarde warned that failure by Washington to raise the federal debt ceiling would wreak serious damage on the US and global economies.
The impasse over the debt limit has already rattled markets and increased the interest rate for one-month US Treasury bills. Stocks began to rebound on Thursday on news of a possible breakthrough.
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Original headline: Republicans propose 6 week extension to debt ceiling
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