President Barack Obama and Republican leaders appeared ready to end a political crisis that has shuttered much of the US government and pushed the country dangerously close to default after meeting at the White House yesterday.
No deal emerged from the 90-minute meeting, but talks continued into the night in an effort to re-open the government and extend its borrowing authority beyond an October 17 deadline. One senior Republican said an agreement could come on Friday, though hurdles remain.
It was the first sign of a thaw in a 10-day stand-off that has weighed on financial markets and knocked hundreds of thousands of federal employees out of work.
"It was a very adult conversation," said Republican Representative Hal Rogers, who attended the meeting. "Both sides said they were there in good faith."
Republicans in the meeting offered to extend the government's borrowing authority for several weeks, temporarily putting off a default that otherwise could come as soon as next week. Obama pushed to also reopen government operations that have been closed since October 1.
Significantly, Republicans seemed to be steering clear of the restrictions on Obama's health-care reforms and spending that prompted the crisis in the first place. Instead, negotiations centred on how far to extend the debt limit and how much funding they would provide the government when it opens, according to Republicans.
The two sides are working on "defining parameters to see if we can make progress", said Republican Representative Pete Sessions, a member of the leadership.
"The president looks forward to making continued progress with members on both sides of the aisle," the White House said in a statement.
The proposal is a significant shift for Republicans, who had hoped to use the threat of a shutdown and a default to undermine Obama's health-care law. But they have been hammered in opinion polls and pressured by the business community who worry the brinkmanship is killing jobs. Republicans worry the stand-off could give Democrats an increased chance of winning control of the House next year.
Now Republicans hope a short-term debt-limit extension will buy time to seek spending cuts, a repeal of a medical-device tax, or other measures they say are needed to keep the national debt manageable.
Conflicting reports of the outcome of the meeting sent ripples through financial markets. US equity index futures tracking the S&P 500 index dropped after a report that Obama had rejected the Republican offer, but rose when details of the meeting trickled out. Major US equity indexes closed 2 percent higher earlier yesterday on hopes of a deal.
The crisis began in late September when Republicans tied continued government funding to measures that would undercut the Affordable Care Act, Obama's signature legislative accomplishment.
The gambit didn't work, as "Obamacare" unveiled its online health-insurance exchanges nevertheless on October 1.
Even so, the exchanges have been plagued by serious technical problems unrelated to the shutdown.
In recent days, Republican leaders have emphasised other goals, such as reining in the retirement and health benefit programmes that pose a long-term threat to the country's fiscal health. - Reuters
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Original headline: US shutdown: The impasse ends
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