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

WASHINGTON – Congressional Republicans walked away from a White House meeting Thursday evening without a deal to either reopen the federal government or raise the nation’s debt ceiling, but there are hints that negotiations are continuing behind the scenes.

President Obama – at least for the time being – rejected an entreaty from House Republicans to increase the $16.7 trillion debt limit for about six weeks, thus stabilizing the government’s borrowing power, in exchange for the administration’s commitment to discuss a laundry list of economic issues, including entitlement reform.

But the White House is trolling for bigger fish and delayed any commitment. Press Secretary Jay Carney issued a statement stating that the two sides “had a good meeting” and that the president and his aides listened to the GOP proposal.

“After a discussion about potential paths forward, no specific determination was made,” the statement read. “The president looks forward to making continued progress with members on both sides of the aisle. The president's goal remains to ensure we pay the bills we've incurred, reopen the government and get back to the business of growing the economy, creating jobs and strengthening the middle class."

The office of House Speaker John Boehner (R-Ohio), who led the 18-member Republican contingent that met with Obama for about 90 minutes, also issued a statement, maintaining that lawmakers offered their proposal to temporarily extend the debt limit and begin discussions to reopen the government.

“No final decisions were made; however, it was a useful and productive conversation,” the statement said.

The president and House leaders agreed that communications should continue throughout the evening.

“House Republicans remain committed to good faith negotiations with the president and we are pleased there was an opportunity to sit down and begin a constructive dialogue tonight,” the statement read.

The White House and Congress are attempting to resolve an ongoing dispute that has interrupted some governmental services and riled markets. House Republicans originally offered to adopt a temporary spending plan, known as a continuing resolution, to fund the federal government beyond the end of the federal fiscal year on Sept. 30. In exchange, the caucus sought to defund the Affordable Care Act, popularly known as Obamacare, the healthcare law that, among other things, requires everyone to obtain health insurance.

Neither Obama nor Senate Democratic Leader Harry Reid, of Nevada, agreed to those terms, leading to a partial governmental shutdown that has extended for 10 days and counting. The Democrats are seeking a “clean” continuing resolution, meaning one with no strings attached. Republicans have amended their demands along the way, asking that the implementation of Obamacare be postponed for a year rather than having its funding killed. None of the proposals met White House muster.

Further complicating the debate is the debt ceiling, which requires congressional action. Treasury Secretary Jack Lew has warned lawmakers that failing to raise the debt ceiling by Oct. 17 would leave the government without borrowing authority, meaning it would not be able to meet its financial obligations.

Lew appeared before the Senate Finance Committee on Thursday and said the current imbroglio represents “an important moment in American history.”

“Congress has an important choice to make for the American people,” Lew said. “Congress alone has the power to act to make sure that the full faith and credit of the United States is never called into question. No Congress in 224 years of American history has allowed our country to default and it is my sincere hope that this Congress will not be the first. At the same time, Congress should pass legislation to fund the government and end the standoff.”

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