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America dangerously close to default: former Obama adviser

Updated October 14, 2013
US President Barack Obama. — File photo
US President Barack Obama. — File photo

WASHINGTON: US lawmakers and experts warned on Sunday that the White House and rival Republican lawmakers might fail to reach a deal to end a default before the deadline.

Senator Lindsey Graham, a Republican, said on ABC’s “This Week” programme that he did not anticipate a deal by the Oct 16 deadline.

“I don’t see one,” Mr Graham said. “If you break spending caps you’re not going to get any Republicans in the Senate.”

David Plouffe, a former senior adviser to President Barack Obama, warned that America was dangerously close to default. “I think the notion that somehow this is going to be easily solved this week is completely false,” Mr Plouffe said on the same programme.

Senator John McCain, a former Republican presidential candidate, urged President Obama to be more engaged in talks to reopen the federal government and avoid default on the nation’s debt.

He said he was “disappointed” that Mr Obama “has not played a more active role in this, as Bill Clinton did in ‘95”.

Mr McCain also criticised his fellow Republicans for tying the government shutdown to an effort to defund President Obama’s healthcare plan.

With just two more working days left to a potential US default, Republicans and Democrats have once again failed to arrive at a compromise to end the stalemate.

On Sunday, Senate Democrats and the White House indicated that they were working on a plan to force House Republicans to reopen the government and raise the debt ceiling. The proposed deal will leave President Obama’s signature healthcare plan largely intact, angering Republicans who have demanded defunding or delaying the Obamacare act.

The partial shutdown of the federal government reached its 13th day on Sunday while the default deadline — Oct 16 — is only two working days away as Monday is also a holiday.

The new Democratic move to force a solution has enraged House Republicans.

“They are trying to jam us with the Senate and we are not going to roll over and take that,” House Budget Committee Chairman Paul Ryan, a Republican, told reporters.

But Senate Majority Leader Harry Reid, a Democrat, offered some hope for a compromise. He told a Sunday afternoon session of the Senate that his talks with Mitch McConnell, the top Republican in the Senate, could lead to an end of the shutdown and an increase in the nation’s debt limit.

“Americans want Congress to do its job. … That’s all they’re asking us to do,” Mr Reid said. “I’m confident and hopeful that will be accomplished.”

The past week saw a flurry of proposals offered and rejected, as both parties and both chambers of Congress failed to resolve their differences.

The latest move failed on Saturday, when 45 Republican lawmakers blocked a Senate bill that would raise America’s debt ceiling through 2014.

The Republicans offered their own proposal to raise the debt ceiling through January and reopen the government for six months in exchange for repeal of the medical device tax.

Senate Democrats rejected the Republican proposal.

The House Republicans’ first proposal, which offered to increase the debt limit for six weeks, was rejected by President Obama.

The Republicans then offered a modified version, to create a framework for negotiations on a bigger budget deal. That offer too was rejected as President Obama wanted the proposed deal to include a mechanism to raise new revenue.

House Democrats are now seeking signatures for a petition that would force a vote on a bill raising the debt limit and reopening the government if it is signed by a majority of House members. If all 200 Democrats sign, they would need 18 Republicans to force a vote.

This effort also is unlikely to succeed.

The Republicans are trying to use the threat of default to undo the healthcare act while President Obama is adamant to enforce it with support from his fellow Democrats who control the Senate but are a minority in the House.