House Shutdown Talks Fail, Focus Shifts to Bipartisan Senate Leadership for Compromise

U.S. President Barack Obama's efforts to reach deal shifts focus to Senate Republications' ideas for reopening the government and raising borrowing authority.

U.S. Senate Democratic leader Harry Reid and Senate Republican leader Mitch McConnell had a private talk on Saturday, opening a "line of communication" between the two in a bid to end a government shutdown and raise the U.S. debt limit, a senior congressional aide said.

The aide said the two met, at the request of McConnell, for about an hour in Reid's office. The aide described their meeting as cordial and productive, and perhaps the start of negotiations.

President Barack Obama’s efforts to reach a deal with Republicans in the House of Representatives sputtered yesterday, and the focus has now shifted to Senate Republicans’ ideas for reopening the government and raising the government’s borrowing authority, which runs out on October 17.

“There is no deal; no negotiations going on,” House Speaker John Boehner previously told a meeting of House Republicans, according to Representative Richard Hudson. The White House had expressed deep reservations with Boehner’s plan for a debt ceiling increase that would have extended only to November 22 and other demands that would have required a series of negotiations to continue under the threat of default and government shutdown.

Meanwhile, there appeared to be growing interest in a plan written by Republican Senator Susan Collins that would fund government operations for another six months at their current level and extend Treasury Department borrowing authority through January 31. Without action by Congress, the United States could be in default by Thursday, when the Treasury warns its borrowing authority would basically be exhausted.

Many House members have headed to their home districts, having been informed that there will be no votes before Monday evening. The complication has deflated some of the optimism about a quick agreement coming as early as this weekend.

Yesterday, David French, the chief lobbyist for the National Retail Federation, told Reuters he had been feeling optimistic Friday. “I’m a little less optimistic today,” he said, “and so are folks I’ve talked to” on Capitol Hill. Companies and trade associations have been stepping up their efforts on Capitol Hill as the debt ceiling deadline approaches.

Retailers are particularly concerned about going into a holiday season with debt ceiling jitters hanging over the economy. Beyond that, French said, “They’re concerned about Washington. They’re concerned about the level of dysfunction. Our members do not like lurching from crisis to crisis without hope of a resolution.”