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WASHINGTON — President Obama and House Republicans failed to reach agreement on a six-week extension of the nation’s borrowing authority during a meeting Thursday at the White House, but both sides agreed to keep talking and the Republican offer was seen as a first step toward ending the budget standoff.
WASHINGTON — President Obama and House Republicans failed to reach agreement on a six-week extension of the nation’s borrowing authority during a meeting Thursday at the White House, but the two sides kept talking, and the offer from politically besieged Republicans was seen as a step toward ending the budget standoff.
Twenty Republicans, led by Speaker John A. Boehner, went to the White House at Mr. Obama’s invitation after a day of fine-tuning their offer to increase the Treasury Department’s authority to borrow money to pay existing obligations through Nov. 22. In exchange, they sought the president’s commitment to negotiate a deal for long-term deficit reduction and a tax overhaul.
In statements afterward that struck the most positive tone in weeks of acrimony, House Republicans described their hour-and-a-half-long meeting with Mr. Obama as “a useful and productive conversation,” while the White House described “a good meeting,” though “no specific determination was made” about the Republicans’ offer. Both agreed to continue talks through the night.
“The president didn’t say yes, didn’t say no,” said Representative Paul D. Ryan, Republican of Wisconsin. “We’re continuing to negotiate this evening.”
People familiar with the meeting said that Mr. Obama pressed Republicans to reopen the government, and that Republicans raised the possibility that financing could be restored by early next week if terms for broad budget negotiations could be reached.
He added: “We put an offer on the table. We had a long, frank conversation about it. We agreed to continue talking and continue negotiating.”
Twenty Republicans, led by Speaker John A. Boehner, went to the White House at Mr. Obama’s invitation after a day of fine-tuning their proposal to increase the Treasury Department’s authority to borrow money to pay existing obligations through Nov. 22. The government is expected to reach its borrowing limit next week. In exchange, they sought a commitment by the president to negotiate a deal for long-term deficit reduction and a tax overhaul.
Representative Hal Rogers, Republican of Kentucky and the chairman of the House Appropriations Committee, said that Mr. Obama was hoping to reopen the government before going forward to negotiations.
The president “didn’t say yes, didn’t say no,” said Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee. He added, “We agreed to continue talking and continue negotiating.”
“I think it’s clear that he would like to have the shutdown stopped, and that would require a C.R.,” Mr. Rogers said, referring to a continuing resolution that would finance the government. “And we’re trying to find out what it is that he would insist upon in a C.R., and what we would insist upon. So our staffs are meeting, and we’ll talk later tonight.”
An initial report that Mr. Obama had rejected the Republicans’ offer was too definitive and came before Republican leaders or the White House had made it clear to reporters that the negotiations would continue.
An initial report that Mr. Obama had rejected the Republicans’ offer was too definitive and came before Republican leaders or the White House had made it clear to reporters that the negotiations would continue.
The Republican proposal could come to a vote as soon as Friday. But the White House and Congressional Democrats remained skeptical that House Republican leaders could pass the proposal. A large faction of Tea Party conservatives campaigned on promises never to vote to increase the nation’s debt limit, and say they do not believe the warnings — including from Republican business allies — that failing to act could provoke a default and economic chaos globally. And House Democrats vowed not to support the proposal without a companion measure to fully fund a government now shuttered for 10 days.
Still, the House Republican offer represented a potentially significant breakthrough. Even if Democrats found fault with the Republicans’ immediate proposal — for example, it would prevent a Treasury secretary from engaging in accounting maneuvers to stave off potential default — it was seen as an opening gambit in the legislative dance toward some resolution before the government is expected to breach its debt limit on Thursday.
Despite the president’s decision, the House Republican offer represented a significant breakthrough. Mr. Ryan, the chairman of the House Budget Committee, said Republicans were now willing to go to formal negotiations with Senate Democrats over a long-term, comprehensive budget framework, a move Republicans have resisted since April. And while House Republicans are divided over even a short-term increase in the debt ceiling, Representative Tim Griffin, Republican of Arkansas, said the proposal would pass with Republican and Democratic votes.
Even before the meeting, the White House and its Democratic allies in Congress were all but declaring victory at the evidence that Republicans — suffering the most in polls, and pressured by business allies and donors not to provoke a government default — were seeking a way out of the impasse.
Many Republicans said they would support their leadership’s proposal only if Mr. Obama agreed to not only negotiate a broader deal on a yearlong debt ceiling increase — which would most likely include spending and entitlement changes — but also negotiate over the terms for a stopgap spending measure that would reopen the government.
After some fretful weeks, the Democrats believe, Mr. Obama was seeing some payoff for his big gamble this year. Burned by his experience with House Republicans in mid-2011, when brinkmanship over the debt limit hobbled the already weak economy, Mr. Obama began his second term vowing never again to negotiate over raising the ceiling or to give any concessions to Republicans for performing an act that is their constitutional responsibility.
“We would get a commitment from the president, a concession, to sit down and talk with us, to negotiate before we go to a yearlong debt ceiling increase,” said Representative John Fleming, Republican of Louisiana. “There won’t be a vote on a temporary extension of the debt limit unless the president agrees this afternoon to sit down and talk with us.”
“The good news is that Republicans have accepted the principle that they’re not going to attach conditions to the debt ceiling,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee. “The bad news is they’ve only extended the debt ceiling for six weeks, which will continue to generate huge amounts of destructive uncertainty in the economy. And, of course, they also continue to keep the government shut down.”
In a closed-door meeting Thursday morning, Republican lawmakers argued, alternately, for both a more moderate and a more hard-line approach. Representative Charlie Dent, a Republican who represents a swing district in Eastern Pennsylvania, stood up and pushed for a vote on a stopgap measure to finance the government with no strings attached, according to members who were in the room. But other more conservative members, Mr. Fleming said, are “concerned that we don’t move the goal posts unless we get the president to come to us, that this has to work bilaterally.”
For House Republicans, the maneuvers represented a near complete reversal of their original strategy in September of going to the mat over the debt limit but not shutting down the government. Now, under pressure from falling poll numbers and angry business supporters, they are seeking a compromise on the debt ceiling. Yet for now, they are still refusing to finance and reopen the government without some concessions.
Leaving the meeting early, Representative Steve King, Republican of Iowa and one of his party’s more conservative members, said he was “not very enthusiastic” about the new strategy.
Mr. Boehner and his colleagues left the White House without speaking to waiting reporters, and quickly gathered in his Capitol suite for further discussion. Their debt limit proposal could come to a vote as soon as Friday.
Still, despite continuing divisions within the Republican ranks and between the parties, the maneuvering suggested that Congressional Republicans want to end a potentially calamitous standoff for which polls show they are getting more of the blame from the public.
Before the White House meeting, administration and Congressional Democrats said they were skeptical that House Republican leaders could pass the proposal. A large faction of Tea Party conservatives campaigned on promises never to vote to increase the nation’s debt limit, and they say they do not believe the warnings that failing to act could provoke a default and economic chaos globally. And Congressional Democrats vowed to oppose any proposal that did not also fully finance a government now shuttered since the fiscal year began Oct. 1.
“When you’re genuinely convinced your own constituency — Democrats or Republicans — are beginning to waver, then that’s when you start closing down and moving forward,” said Representative Jack Kingston, Republican of Georgia, who is running for the Senate.
“We’ll see what they’re able to pass,” said Mr. Obama’s press secretary, Jay Carney.
He said that had not happened yet, “but I do think that what reopens shutdowns more than policy are polls.”
Senate Democrats had their own White House meeting with Mr. Obama and Vice President Joseph R. Biden Jr. three hours before the House Republicans arrived, and the majority leader, Senator Harry Reid of Nevada, declined to embrace the Republicans’ debt limit proposal until he saw it. He told reporters that Democrats would not negotiate on further deficit reductions until House Republicans agreed to the measure passed by the Senate to finance and open the government through mid-November.
Economists across a broad spectrum agree that violating the debt limit — which could happen as early as next week, absent Congressional action — would probably severely damage the economy. The new Republican proposal could temporarily remove that threat.
“Not going to happen,” Mr. Reid said. “Open the government,” he added. “There is so much pain and suffering out there. It is really tear-jerking, to say the least.”
Treasury Secretary Jacob J. Lew implored Congress on Thursday to raise the debt ceiling, warning the Senate Finance Committee of potentially severe market and economic repercussions if it did not.
Mr. Ryan said before the White House meeting that Republicans were now willing to formally negotiate with Senate Democrats over a long-term, comprehensive budget framework. The Republicans have resisted such a move since April, fearing that it would require compromises, like raising additional tax revenues, that would enrage the party’s conservative base heading into the 2014 midterm elections.
In testimony before the committee, Mr. Lew stressed that the Treasury Department would run out of “extraordinary measures” to free up cash in a matter of days. At that point, the country’s bills might overwhelm its cash on hand in addition to any receipts from taxes or other sources, leading to an unprecedented default.
Many House Republicans, leaving a closed-door party caucus earlier Thursday that at times grew contentious, said they would support their leadership’s short-term debt limit proposal. But they said they would do so only if Mr. Obama agreed to negotiate a broader deficit reduction deal, with big savings from entitlement programs.
Mr. Lew said that the Treasury had no workarounds to avoid breaching the debt ceiling. “There is no plan other than raising the debt limit,” he said. “The legal issues, even regarding interest and principal on the debt, are complicated.”
But the president has insisted he will not agree to significant reductions in projected Medicare and Medicaid spending — even his own tentative proposals — unless Republicans agree to raise revenues by curbing tax breaks for corporations and wealthy individuals. And Mr. Boehner in recent days reaffirmed the party’s anti-tax stance, suggesting future talks could founder on the same tax-and-entitlement spending divide that caused past negotiations to collapse.
In not addressing the shutdown, Republicans would keep pressure on Democrats to negotiate on a package of deficit reduction and tax overhaul proposals.
Economists across a broad spectrum agree that breaching the debt limit would damage the economy and could be calamitous if it is prolonged. The new Republican proposal could temporarily remove that threat.
Mr. Griffin, the Arkansas Republican, said that the plan the speaker presented appealed to him because it would give House Republicans some breathing room as they continued to try to plot their next steps.
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W. Peters and Annie Lowrey contributed reporting.
“We can’t even contemplate putting our full faith and credit, our credit rating and our financial system at risk, and this makes that clear,” he said.
House Republican leadership aides said the Nov. 22 date was picked to coincide with the Thanksgiving recess to add pressure on both parties to come to a compromise. But with so little time, Mr. Boehner conceded, “You could end up back in the same place.”
Representative Mark Meadows, a freshman Republican from North Carolina who was an initial champion of the “defund Obamacare” movement, said he was in favor of the new strategy.
“Really, what this is all about is negotiating and finding common ground,” he said. “This looks like a window to be able to do that, and I’m supportive.”
Meanwhile, a group of Republican senators began meeting with Senator Mitch McConnell of Kentucky, the Republican leader, to find a bipartisan solution to the twin fiscal impasses.
The senators are examining a yearlong resolution to reopen the government and finance it at levels that reflect the automatic spending cuts known as sequestration, but with added flexibility to help government agencies and departments deal with the tight budgets. The plan would also include a short-term increase in the debt ceiling, reflecting the House’s plan, and would include a repeal of a medical device tax unpopular with some Democrats.
The strategy is similar to a plan proposed earlier this week by Senator Susan Collins, Republican of Maine, but it would also tighten income verification rules for the new health care exchanges.
Senate Republicans have begun shopping this plan around to their Democratic counterparts, and they hope to attach it to the debt ceiling extension that the House sends over, before sending it back for a vote.
During the Senate hearing, Republicans chastised the administration for focusing on the debt limit more than the country’s debt, and for refusing to negotiate. Democrats and Republicans generally talked past one another at the hearing, with little agreement on how to raise the ceiling and how to manage the budget.
If the Obama administration will not negotiate over entitlement programs like Medicare now, “when will they negotiate?” asked Senator Orrin G. Hatch, Republican of Utah.
Mr. Lew said that the Obama administration would be willing to sit down and negotiate longer-term budgetary changes, but would not tie such negotiations to the debt ceiling. He would not say how long or how big a debt ceiling increase the administration wanted.
Jonathan Weisman and Annie Lowrey contributed reporting.
