'A Good Meeting' with GOP at White House as Lew Warns of 'Chaos' on the Hill

But House Republicans have refused to offer a clean debt ceiling increase without some concessions in return. Obama again refused, insisting that Congress should be just as concerned as the White House in making sure the federal government can pay its bills.

“Among the risks that we control, the biggest threat to sustained growth in our economy is the recurrence of manufactured crises in Washington and self-inflicted wounds,” Lew said. “Unfortunately, we now face a manufactured political crisis that is beginning to deliver an unnecessary blow to our economy -- right at a time when the U.S. economy and the American people have painstakingly fought back from the worst recession since the Great Depression.”

Failure to raise the debt limit, Lew said, carries “potentially catastrophic impacts.” The nation could face a significant loss in the value of the dollar, markedly elevated interest rates, negative spillover effects to the global economy “and real risk of a financial crisis and recession that could echo the events of 2008 or worse.”

“It would be chaos,” he said.

Shortly after Lew’s presentation, Boehner stepped forward with a proposal for a short-term increase in the debt limit, which he termed “a good-faith offer on the part of Republicans to meet the president halfway.” Boehner noted it is up to Obama to come to the table to negotiate long-term solutions to reduce the nation’s debt and deficits, fund the government and provide fairness under the healthcare law.

“So what we want to do is to offer the president today the ability to move a temporary increase in the debt ceiling, an agreement to go to conference on the budget, for his willingness to sit down and discuss with us a way forward to re-open the government, and to start to deal with America’s pressing problems,” Boehner said. “Listen, it’s time for leadership. It's time for these negotiations and this conversation to begin. And I would hope that 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.”

House Republicans intended to proceed with their plans Thursday night but postponed action as a result of the meeting with Obama. Lawmakers indicated leadership and staff are tinkering with the proposal to satisfy the president’s concerns.

Obama has indicated he desires a debt ceiling increase that will last longer than the proposed six weeks. And he is still seeking to reopen the federal government.

But asked if the Senate will open budget negotiations while the government’s doors are shut, Reid responded, "Not going to happen.”

Adding to the snags is Obamacare, the most significant achievement of the president’s first five years in office. It appears House Republicans are backing off their defunding and delaying demands and instead are looking at forcing spending reductions and tax reform in return for their support of a continuing resolution and a debt ceiling hike.

That strategy isn’t supported by all factions. Jenny Beth Martin, the national coordinator of the Tea Party Patriots, said the discussion “ought to be less about the shutdown and the debt limit and more about the issue that brought us to this place. Obamacare is a disaster unfolding before our eyes, and it is for this reason that American conservatives insist that congressional Republicans stand their ground in opposition to it.”

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GOP Chairman: ‘We Want Some Breathings Space’ with Short-Term Debt Ceiling Hike