Two days into a government shutdown that has put more than 800,000 federal workers on furlough and agencies in crisis mode, President Barack Obama met privately at the White House with the heads of the nation's top banks on Wednesday to discuss the economic impasse.
Obama hopes to enlist the executives’ support as he urges congressional action to resolve the government shutdown and to avoid breaching the Oct. 17 deadline to raise the nation’s debt limit — a situation that could batter financial markets around the world.
Although the meeting was planned before this week's shutdown, it comes as Republicans in the House of Representatives continue refusing to allow a vote on a temporary spending resolution to fund the government. Many Republicans, including Speaker of the House John Boehner, want any bill that’s passed to include a delay of provisions of the Affordable Care Act (ACA), also known as Obamacare. Obama and the Democrats have refused to work with such a measure.
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Shortly before the meeting Wednesday, JPMorgan Chase Chief Executive Officer Jamie Dimon said he "would love to see a resolution" to the shutdown. Afterward, Lloyd Blankfein, the head of Goldman Sachs, warned about the consequences of a failure to resolve the crisis. "We shouldn't use the threat of causing the U.S. to fail on its obligations to repay its debt as a cudgel," he told reporters outside the White House.
Amid the government shutdown and ahead of the looming debt ceiling debate, the U.S. Treasury on Tuesday started using its last tools for pushing back the date when the government will run out of legal borrowing authority, Treasury Secretary Jack Lew said.
In a letter to lawmakers, Lew said the Treasury Department was suspending some reinvestments of a government currency exchange fund, and would enter into a debt swap with the Federal Financing Bank and the Civil Service Retirement and Disability Fund.
Lew said that these measures would allow the government to continue operating below its $16.7 trillion debt limit for a little while longer — but that by Oct. 17, the government will have exhausted its borrowing authority and will be left with about $30 billion in cash to pay the nation's bills.
If Congress fails to raise the $16.7 trillion borrowing cap, the United States — the world’s largest economy — would go into default, potentially sending shock waves through international financial markets. The Obama administration has been unequivocal in its refusal to negotiate on the debt limit or to link raising it to a particular set of budget priorities.
Some conservative Republicans have signaled that they may use the same tactic on the debt limit that they have used on government funding.
Paul Ryan, a Wisconsin Republican who is chairman of the influential House Budget Committee, made the link explicit to reporters Tuesday. "We have a debt limit coming," he said. "Most budget agreements in the past have always involved debt limit increases.
"That's what we think we need,” he said, “a forcing action to bring two parties together.”
But some groups that have traditionally been at odds with the president’s policies, including over regulation and health care, are urging the passage of a budget and a subsequent raising of the debt ceiling.
Even as the White House meeting appeared to shore up some support from executives of the nation’s top banks, The Associated Press reported that the American Chamber of Commerce, which has been a critic of the president’s health care plan and tax policies, sent Congress a letter — signed by more than 250 business groups — urging an end to the shutdown and a raising of the debt ceiling.
While the letter made a point of criticizing some of the president’s policies regarding entitlement programs and unsustainable levels of government debt, it said the debt ceiling must be raised “in a timely manner” in order to “remove any threat to the full faith and credit of the United States government."
Still, some conservative Republicans are unlikely to be swayed.
Rep. Dana Rohrabacher, R-Calif., told the AP that “it wouldn't make any difference” to him if big business thought the government shutdown was adversely affecting the economy.
Also on Wednesday, Obama was set to host congressional leaders later in the afternoon.
Boehner's office said the Ohio Republican would attend, a possible signal that the president is ready to start negotiating on GOP demands about the new health care law in exchange for funding the government.
"We're pleased the president finally recognizes that his refusal to negotiate is indefensible," Boehner spokesman Brendan Buck said. "It's unclear why we'd be having this meeting if it's not meant to be a start to serious talks between the two parties."
Rep. Steny Hoyer of Maryland, the second-ranking House Democrat, said Democrats would overwhelmingly accept a short-term spending measure to reopen the government and increase the nation's debt limit while other political differences are worked out. "That would be a responsible way to go," Hoyer told CNN.
Al Jazeera and wire services