(Corrects figure on budget deficit as a percentage of GDP in 32nd paragraph. For more on the shutdown, see EXT2.)
Oct. 2 (Bloomberg) -- President Barack Obama, declaring himself “exasperated,” said he won’t negotiate with Republicans on the U.S. budget until they reopen the government and raise the debt ceiling without conditions.
Obama spoke today on CNBC in advance of an Oval Office meeting with the top four congressional leaders, including House Speaker John Boehner. Obama said Boehner should allow a vote on a bill to reopen the government, which the president said would pass on a bipartisan vote.
“John Boehner right now has not been willing to say no to a faction of the Republican Party that are willing to burn the house down because of an obsession with my health-care initiative,” Obama said.
Today’s meeting is the first high-level discussion since the government began a partial shutdown yesterday at midnight. Republicans have been trying to get Obama to the negotiating table and to back off his insistence on a short-term spending bill and debt-limit increase without policy conditions.
At today’s meeting, Obama will be joined by Boehner, an Ohio Republican; Senate Majority Leader Harry Reid, a Nevada Democrat; Senate Minority Leader Mitch McConnell, a Kentucky Republican; House Minority Leader Nancy Pelosi, a California Democrat; Vice President Joseph Biden and Treasury Secretary Jacob J. Lew.
“Saying you won’t communicate guarantees you’re going to have a problem,” Representative Kevin McCarthy of California, the third-ranking Republican in the House, said today.
McCarthy said he sees the spending and debt-limit debates merging.
“I’d like to get one agreement and be done,” he said.
House Republicans are divided between hard-liners aligned with Senator Ted Cruz of Texas, who are insisting on confrontation over the health-care law, and at least 15 others who say they would support the Senate Democrats’ spending bill, which would end the shutdown without conditions attached.
One member of that group, Representative Peter King of New York, said in an interview that he met privately with Boehner to urge him to allow a vote on the Senate bill.
According to King, Boehner asked for more time.
“I think the plan is for the Cruz Republicans to exhaust themselves,” King said.
Ahead of the White House meeting, Reid said he had a “cordial” telephone call with Boehner and sent the speaker a letter urging him to accept the Senate’s short-term spending bill and then negotiate on the entire budget.
Michael Steel, a spokesman for Boehner, said negotiating after Democrats get what they want is “not much of an offer.”
The U.S. government started a partial shutdown yesterday and must raise the U.S. debt limit this month to ensure the government has enough money to pay all its bills.
Stocks fell and Treasuries rose, a day after as many as 800,000 federal workers were sent home with no paychecks and parks and other services were shuttered across the country.
“Washington is having a negative impact on the lives of ordinary people,” Obama said.
The Standard & Poor’s 500 Index slipped 0.1 percent as of 4 p.m. in New York, trimming an earlier drop of 0.9 percent. The benchmark 10-year Treasury yield fell three basis points to 2.62 percent.
House Republicans, trying to force bargaining with Democrats over the shutdown impasse, began bringing five partial-funding measures to floor votes today. The proposals drew immediate veto threats from the White House.
On the list are three measures that failed to win enough votes through an expedited process yesterday that would reopen parks, provide funding for the Department of Veterans Affairs and let Washington’s city government spend its money. The Washington bill passed in a voice vote.
Another two -- funding for the National Institutes of Health and to pay the National Guard and Reserve forces -- are set to be considered. House Republicans sought to block procedural attempts by Democrats to offer a bill without policy conditions, a congressional aide said on condition of anonymity.
The move is designed to blunt some of the most visible effects of the shutdown and compel Democrats to choose between popular programs and their insistence on a full resumption of government funding.
“It is the small steps that can often move us toward a consensus,” said Representative Jack Kingston, a Georgia Republican.
Obama said he didn’t want to give in now because that would just invite repeated negotiations.
Reid also said the Senate would consider a debt ceiling bill without policy conditions before the government runs out of borrowing authority Oct. 17. The government will be unable to pay its bills with cash sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
“Speaker Boehner is the one person who can end the Tea Party shutdown,” said Senator Charles Schumer, a New York Democrat who said Boehner was an “accomplice” and a “puppet” of Republican Senator Ted Cruz of Texas.
White House officials announced earlier today that Obama is shortening his planned trip for meetings with leaders in Asia, canceling stops in Malaysia and the Philippines because of the shutdown.
The furlough of about 800,000 federal employees and the closing of offices, parks and museums may cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc.
Though that’s a fraction of the country’s $15.7 trillion annual economy, the effects may multiply over time as consumers and businesses defer purchases and other spending plans.
Both sides are jockeying for the political high ground in the standoff. Democrats said the nation was being taken hostage by the Republicans’ Tea Party faction, while the Republicans faulted Senate Democrats and Obama for being unwilling to negotiate over any proposal to delay or curtail the health-care act, which opened for insurance enrollment yesterday.
Unlike past fiscal feuds, this dispute is more about the health law than the overall amount of government spending. Democrats say they have already made a concession by accepting spending levels set under the across-the-board cuts known as sequestration, which first went into effect earlier this year and were part of the deal to avoid a 2011 default.
The U.S. budget deficit in June was 4.2 percent of gross domestic product, down from 10.1 percent in February 2010 and the narrowest since November 2008, when Obama was elected to his first term, according to data compiled by Bloomberg from the Treasury Department and the Bureau of Economic Analysis.
Democrats are counting on the split to force Boehner to allow a vote on that short-term spending bill, which probably would pass with the support of most Democrats and some Republicans.
Flanked by furloughed employees of the Environmental Protection Agency and the National Weather Service, Democrats today pointed out that many federal workers already have a smaller income in 2013 because of the across-the-board spending cuts that have idled some agency workers for more than a week.
Senator Mark Warner, a Virginia Democrat, said 300,000 federal workers in his state, Maryland and the District of Columbia are hostage to a small group of House Republicans who want to keep the fight over the health-care law going indefinitely.
“We’re going to put our economy on the skids because they won’t get their way,” Warner said.
The effects of the partial government include the closure of Internal Revenue Service call centers. About 10 to 15 percent of the 34,500 employees of a U.S. unit of London-based BAE Systems Plc may be affected by the shutdown.
Octogenarian veterans ignored barricades around the World War II memorial on Washington’s Mall yesterday to view the outdoor site. National parks and museums, though, will stay closed.
Other services will continue uninterrupted. Social Security and Medicare benefits will be paid. U.S. troops will remain at their posts around the world and will be paid under a bill Obama signed on Sept. 30. Air-traffic controllers and airport security screeners will keep working.
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