US lawmakers split despite October 17 debt deadline
By Arthur Macmillan, AFPWashington - The United States is still facing a potentially devastating sovereign debt default, after senators failed to agree on terms to reopen the federal government and raise the country's borrowing limit.
October 14, 2013, 2:05 pm TWN
Republicans and Democrats -- at war over the country's finances and ideological direction for more than two weeks -- tried to shed a positive light Sunday on a weekend of talks that despite the threat of global economic censure did not produce a solution.
The Senate convened a rare Sunday session to try and break the budgetary impasse that prompted the government to shut down on October 1, a move that has since damaged domestic confidence and undermined America's reputation as the world's leading economic superpower.
If the US debt ceiling is not raised by October 17, the Treasury would run out of money and could begin defaulting on its obligations for the first time in history, with likely dire consequences for the global economy.
Seeking to avert that outcome, the Democratic leader in the Senate, Harry Reid, talked up the dialogue with Republicans -- represented by top Senator Mitch McConnell -- though nothing concrete was disclosed.
"I'm optimistic about the prospect for a positive conclusion," Reid said.
US Treasury Secretary Jacob Lew has told the International Monetary Fund's policy steering committee that Washington understood its reputation as a safe harbor was at risk.
Stock markets are already factoring in a possible default if no deal is reached between President Barack Obama, his Democratic Party and rival Republicans by Thursday night.
But the threat of a global economic rebuke has so far done little to prompt an agreement.
Polls released during the shutdown have shown Congress's approval rating at record lows, with Republicans blamed most for the political gridlock in Washington.
Both parties in recent days indicated a deal must be done at all costs, despite the bitter bipartisan rancor.
"This is something that's wreaking havoc around the world and will affect economic growth, and I do hope that over the next week we'll reach a conclusion and I think we will," Republican Senator Bob Corker told "Fox News Sunday."
Obama rejected an offer by Republicans in the House of Representatives to lift the debt ceiling for six weeks while negotiations would continue on reopening the government, insisting on a longer-term solution.