President Barack Obama makes a move to address the ongoing government shutdown and the debt ceiling problem by inviting the Republican representatives Thursday for a meeting. The White House has persistently stressed the threatening economic repercussion if Congress cannot act on the increase of debt ceiling during the month.
Stern warnings
Obama sternly reminded Wall Street that it should be alarmed if the debt ceiling setback is not dealt with on time. He also told Jack Lew, Treasury Secretary, that Congress is playing a dangerous sport by not heeding the call for them to work on the borrowing limit which should be put in place by October 17. The Republicans, apparently, do not believe that the Treasury will not be able to settle obligations should the House fail to focus on elevating the government’s borrowing threshold.
Unyielding Congressmen
Rep. Lee Terry of Nebraska, one of the Republican congressmen, told the press that the October 17 deadline in settling the debt ceiling issue is not credible. He added that most of his party mates are not inclined to give in to the warning of default despite Obama’s repeated pronouncements.
Willing to talk
The President expressed willingness to talk with the Republicans about every detail in the budget and possibly come up with a negotiation to put a stop to the government shutdown and avoid fiscal crisis. With no approved budget and no certain credit limit, the country may fail to meet its obligations. Nine days after the partial government closure following the failure of Congress to come up with a budget, Obama said he wants to call for a discussion to bring the conflict to an end. Obama wants the government to resume full operation after the debt limit is set so he can settle future financial allocations.
Short-term debt limit increase
In the meantime that a resolve has not yet been met over the future fiscal distribution, the House of Representatives is planning to come up with a short-term debt limit increase to end the continuing shutdown. A Republican official reportedly told news agencies that the GOP is looking at ways to legislate regulations on increase of borrowing limit for an indefinite time. The International Monetary Fund itself has cautioned the government about the probable financial crisis that can affect the entire world if there is no finalization of the debt ceiling increase.
Outrageous impact
Jack Lew of the Treasury Department said the debt limit in May was managed with all possible measures, thus leaving a very small margin for manageability for the October 17th fiscal deadline. This means, he said, that the country’s borrowing capacity has gone down to a critical level and a financial disaster is looming if the debt limit is not increased accordingly. Lew added that only $30 billion remains to cover $50 billion to $60 billion responsibilities and that should a default takes place, it would have an outrageous impact on the economy and everything is catastrophically at risk. The Treasury head warned that credit markets will be at standstill, dollar value will dip and interest rates will rise steeply.
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