White House open to short-term hike in debt limit; Democrats drafting legislation
WASHINGTON (AP) - The White House signalled on Monday that it would be open to a short-term hike in the US debt limit as the United States moved a step closer to its first-ever default while a separate impasse, a partial government shutdown, entered its second week.
The shutdown, which centres on a fight over funding for President Barack Obama's new health care law, has pushed hundreds of thousands of workers off the job, closed national parks and museums and stopped an array of government services. A default could have far bigger consequences. Economists say it could trigger a financial crisis and recession that would echo 2008 - or worse. The 2008 financial crisis plunged the US into the worst recession since the Great Depression of the 1930s.
Senate Democrats are drafting legislation to raise the US debt limit without the type of unrelated conditions Republicans have said they intend to demand, officials said on Monday.
A defiant Mr John Boehner, the Republican leader of the House of Representatives, has insisted that Mr Obama must negotiate on changes to his health care law and spending cuts if he wants to end the shutdown and avert a default. Mr Boehner said on Sunday that he lacks the votes to pass a straightforward temporary spending Bill that would keep the government operating.