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Wednesday, October 9, 2013

US shutdown enters 2nd week as debt default looms 10-09

US shutdown enters 2nd week as debt default looms

The United States appeared to be headed towards default, with the fast approaching October 17 deadline of debt ceiling increasing, as the Government shutdown entered its second week, amid opinion polls showing fast dip in the approval rating of the Opposition Republican Party.
The White House and the Democratic party leadership in the Congress, by late last night, were appeared to be working towards to convince the Republican party to agree to a long-term $1-trillion debt limit increase.
But the Republican leadership did not appear to do this without any condition.
“We’re not going to give the President a clean debt ceiling increase that’s a recipe for disaster for our country,” said John Cornyn, the Republican Senator from Texas, who is also Co-Chair of the Senate India Caucus.
Still there did not appear to be any resolution to the Government shutdown, that entered its second week today.
Even though the Pentagon recalled majority of its furloughed employees, hundreds and thousands of federal employees remained without work, thus without pay too, this badly affected the performance of the Government. This is the first such shutdown in 17 years.
Meanwhile, a Washington Post-ABC News survey found that 70 per cent of Americans disapprove of the way Republicans are handling budget negotiations, up from 63 per cent last week, with 24 per cent approving.
At the same time President Barack Obama’s approval rating on budget matters ticked up slightly over the same time period — from 41 per cent to 45 per cent — but 51 per cent disapprove, the poll said.
Earlier in the day, Obama ruled out any negotiations with the Republicans unless they reopen the Government.
“We’re not going to negotiate under the threat of further harm to our economy and middle-class families. We’re not going to negotiate under the threat of a prolonged shutdown until Republicans get 100 per cent of what they want,” he said.
White House Press Secretary, Jay Carney, said Obama is ready to negotiate with Republicans but not under threat.
“He is ready to do that, just not under threat of shutdown, not under threat of default,’’ he said.
The prospect of a default had a direct impact on the market yesterday, with a drop in the stock market fell. The Standard & Poor’s 500 index down 14.38 points, to 1,676.12.
Meanwhile, top Wall Street Executives yesterday warned that any effort to pay interest on US debt before other obligations such as Social Security, would pose severe risks to financial markets and the economy, The Wall Street Journal said.
Speaker of the US House of Representatives, John Boehner, alleged that Obama is putting the economy at risk by refusing to negotiate with the Republicans over spending and the debt ceiling.
“The President’s refusal to negotiate is hurting our economy and putting our country at risk,” he said on the floor of the House.
(This article was published on October 8, 2013)

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