WASHINGTON — After weeks of gridlock, House Republicans floated broad hints Tuesday they might be willing to pass short-term legislation re-opening the government and averting a threatened default — in exchange for immediate talks with the Obama administration on measures to reduce deficits and change the nation’s three-year-old health care law.
“I suspect we can work out a mechanism to raise the debt ceiling while a negotiation is underway,” said Rep. Tom Cole, an Oklahoma Republican, who is close to Speaker John Boehner.
“I want to have a conversation,” Boehner told reporters. “I’m not drawing lines in the sand. It is time for us to just sit down and resolve our differences.”
The White House responded with marginally less bellicose language of its own without yielding on its core demands in the latest test of divided government.
President Barack Obama told Boehner in a phone call he would be willing to negotiate “over policies that Republicans think would strengthen the country” once the eight-day partial shutdown was over and the threat of default eased.
The events unfolded as the stock market sank for the second day in a row. And in the latest in a string of dire warnings, the International Monetary Fund said failure to raise the $16.7 trillion borrowing limit later this month could lead to a U.S. government default that might disrupt global financial markets, raise interest rates and push the U.S economy back into recession.
Treasury Secretary Jacob Lew has said the deadline for Congress to act is Oct., 17, setting that as the day the government will exhaust its ability to borrow funds and will have to rely day-to-day on tax and other receipts to pay its bills.
In the Senate, Majority Leader Harry Reid readied legislation to raise the debt limit by roughly $1 trillion, enough to prevent a recurrence of the current showdown until after the 2014 elections.