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Saturday, December 3, 2016

Frozen By Shutdown, U.S. Warns Of ‘Catastrophic’ Default

Frozen By Shutdown, U.S. Warns Of ‘Catastrophic’ Default

Washington (AFP) – President Barack Obama demanded an end to a three-day government shutdown he decried as a reckless “farce,” piling pressure on Republicans to climb down first on a budget impasse.

The U.S. Treasury meanwhile warned of “catastrophic” consequences if there is no deal within weeks to raise the country’s debt ceiling, and the IMF chief said navigating a way out of that next crisis was “mission critical.”

Obama traveled to the Washington suburbs to lambast Republican House Speaker John Boehner, who emerged from a White House meeting late on Wednesday complaining that the president would not negotiate with him.

“Take a vote, stop this farce and end this shutdown right now,” Obama said during a fiery speech in the Maryland suburb of Rockville, which is home to many federal workers laid off in the shutdown.

Branding the crisis a “reckless Republican shutdown,” Obama said that Boehner could reopen the government and get hundreds of thousands of people back to work “in just five minutes” by passing a temporary operating budget with no partisan strings attached.

“Speaker John Boehner won’t even let the bill get a yes or no vote, because he doesn’t want to anger the extremists in his party,” Obama said.

The government ran out of money on Monday, after Congress failed to pass a budget, forcing authorities to send all non-essential workers home and to close museums, monuments and national parks that are all popular with tourists.

The Democratic-led Senate had turned back repeated Republican efforts to pass a budget while defunding or delaying Obama’s health care law, which is a centerpiece of his political legacy and reviled by Tea Party conservatives.

The talks at the White House between Obama and congressional leaders made no progress, and there is no sign that the dispute will be solved before dragging into a second week.

The crisis rattled Wall Street on Thursday, where the Dow Jones Industrial Average dropped 136.66 points (0.90 percent) to 14,996.48, amid ongoing jitters from the shutdown and nervousness about a looming battle over Congress’s responsibility to raise the $16.7 trillion U.S. statutory borrowing limit.

If there is no resolution before October 17, the government could begin running out of money to pay its bills and an unprecedented U.S. debt default could result.

But Republicans are again demanding concessions on Obamacare before voting to raise the debt ceiling, raising fears of unpredictable consequences, which the Treasury said in a report Thursday could plunge the United States into deep recession and rock global markets.

“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth,” the report said.

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