WASHINGTON — President Obama summoned top congressional leaders to the White House on Wednesday, but despite his stern warnings about the need to halt the government shutdown and prevent a potentially catastrophic debt default in two weeks, the meeting provided little hope for a quick solution.
Coming two days after much of the government ceased operating, it was the first time in more than three months that Obama and the top four Capitol Hill leaders had even been in the same room, illustrating just how polarized the nation’s leaders have become. But after nearly 90 minutes in the Oval Office, both sides emerged with positions unchanged and the government heading into its third day of shutdown.
“The president reiterated one more time tonight that he will not negotiate,” House Speaker John Boehner said as he emerged after a meeting that he said was little more than “a nice conversation, a polite conversation.”
Senate majority leader Harry Reid mocked the speaker as he emerged, saying, “We’re through playing these little games.”
In an interview with CNBC before the meeting, Obama said he would not negotiate with Congress until House Republicans passed a government funding bill that did not cut or delay his health care law, something they have shown little inclination to do.
“The only thing that’s stopping it right now is that John Boehner has not been willing to say no to a faction of the Republican Party that are willing to burn the house down because of an obsession with my health care initiative,” Obama said.
The White House meeting also included House minority leader Nancy Pelosi, Senate minority leader Mitch McConnell, and Vice President Joe Biden.
Even as 800,000 federal employees remained furloughed and government agencies were shuttered or crippled, the White House began turning its attention to the next battle: raising the debt ceiling. Treasury Secretary Jacob Lew has warned that the government will not be able to borrow more money unless the debt ceiling is raised by Oct. 17. Administration officials and economists have warned failing to raise the ceiling would trigger a default on government debt that could lead to meltdown in debt markets and push the economy into another recession.
When asked whether Wall Street should shrug off the stalemate in Washington, Obama told CNBC: “I think this time is different. I think they should be concerned.”
“Am I exasperated? Absolutely I’m exasperated because this is entirely unnecessary,” Obama said. “I have bent over backwards to work with the Republican Party and have purposely kept my rhetoric down.”
Obama hosted 14 chief executives from top financial firms at the White House on Wednesday, who afterward issued dire warnings about the debt ceiling and called on Republicans not to use it as a bargaining chip.
“There’s a consensus that we shouldn’t do anything that hurts this recovery,” Lloyd Blankfein, chief executive of Goldman Sachs, said as he left the White House. “You can relitigate these policy issues in a political forum, but we shouldn’t use threats of causing the US to fail on its obligations to repay its debt as a cudgel.”
The business community frequently sides with Republicans and has fought some of Obama’s health care and financial regulatory laws. But the White House has won support from business in the current fight, with groups such as the US Chamber of Commerce urging Republicans to drop their demands that the health care law be tied to funding the government. Corporate leaders have warned that a debt ceiling crisis could be a disaster.
“There’s precedent for a government shutdown,” Blankfein said. “There’s no precedent for a default . . . and I’m not anxious to be part of the process that witnesses it.”
Congressional leaders, meanwhile, made no progress toward ending the stalemate. Reid placed a phone call to Boehner, which the Senate leader called cordial. Reid also sent a letter to Boehner, saying that Senate Democrats would negotiate only after the House approved a temporary budget to reopen the government.
But his offer, which Reid cast as a new one, did not amount to much. Reid essentially said he would negotiate once the House dropped its current demands, which House Republicans said was not a negotiation at all.
“The entire government is shut down right now because Washington Democrats refuse to even talk about fairness for all Americans under Obamacare,” Boehner spokesman Michael Steel said. “Offering to negotiate only after Democrats get everything they want is not much of an offer.”
The House is attempting to restore some government functions piecemeal. On Wednesday, leaders approved three smaller funding bills, which would provide money for national parks and museums, the District of Columbia government, and the National Institutes of Health.
The House is planning to vote on Thursday to fund the National Guard and the Veterans Administration.
But so far, Democrats have remained united, opposed to any partial approach to funding the government. Obama has vowed to veto such measures.
House Republicans and Senate Democrats have remained at loggerheads for weeks, barely talking to one another. That impasse on Tuesday led to the first government shutdown in nearly two decades.
Most House Republicans have insisted that any government funding bill include cuts or delays to President Obama’s signature health care law, a position Democrats have declared a nonstarter.
About a dozen House Republicans have spoken out in favor of abandoning that approach, but they have not built enough of a movement to upend the plans of Tea Party-backed Republicans who want to hold firm.
Increasingly, it appears that one potential solution is to tie the government funding to an increase of the debt limit. It is an approach that both Democrats and Republicans have said they could support.
“That’s what we think we need — a forcing action to bring two parties together,” Representative Paul Ryan, an influential Republican from Wisconsin, said on Tuesday. “We don’t want to close the government down. We want it open. But we want fairness. . . . We want a budget agreement that gets the debt under control.”
When Obama and Boehner tried to hammer out a so-called grand bargain in August 2011, they failed. They averted a economically dangerous debt default by creating automatic budget cuts known as the sequester, in exchange for Republican agreement to raise the debt ceiling. But with both sides at odds once again, it is highly uncertain how — and whether — combining the debt ceiling and government funding into one deal can work.
“My fear is that we’re on a course where the government stays shut down until we get the debt limit,” said Robert Greenstein, president of the Center on Budget and Policy Priorities, a nonprofit think tank. “The Republicans, with a fair amount of bravado, think the president has to cave because he can’t allow a default . . . but the White House, in my view, is even firmer on the debt limit.”
“I think the odds are increasing that we go right up to the brink on default,” he added. “We could actually default.”