President Barack Obama and congressional Republicans are in stalemate over a partial government shutdown now in its second week. And a looming crisis over the federal debt limit is rapidly approaching, with economists saying that could have a devastating effect on the U.S. economy.
President Barack Obama is hosting top House Republicans to seek an opening in an impasse that has shuttered much of the government and threatens a catastrophic federal default.
The White House meeting, set for Thursday, comes as House GOP leaders are contemplating advancing a short-term debt limit increase designed to calm jittery stock and bond markets and allow more time to untie the knot that has the government partially shut down for a 10th day and facing a first-ever default between Oct. 17 and the end of the month.
A short-term debt limit measure was expected to be a topic at a closed-door House GOP meeting Thursday morning. It wasn't clear what conditions GOP leaders might seek to attach to the bill, if any, but conservatives consistently have been pushing top Republicans like Speaker John Boehner to add conditions beyond what Obama says he'll accept.
Also, Treasury Secretary Jacob Lew was heading to Capitol Hill on Thursday to both give and get a public scolding. Lew's appearance before the Senate Finance Committee promised to be yet another public restatement of the administration's stance that Congress needs to reopen the government and lift the U.S. borrowing cap before Obama will negotiate over the nation's budget ills.
The game of Washington chicken over increasing the debt limit - required so Treasury can borrow more money to pay the government's bills in full and on time - already has sent the stock market south, spiked the interest rate for one-month Treasury bills and prompted Fidelity Investments, the nation's largest manager of money market mutual funds, to sell federal debt that comes due around the time the nation could hit its borrowing limit.
Wednesday featured lots of activity but no progress toward ending the budget and debt limit impasses.
Obama had House Democrats over to the White House, while Republican conservatives heard a pitch from the House Budget Committee chairman, Rep. Paul Ryan, R-Wis., on his plan to extend the U.S. borrowing cap for four to six weeks while jump-starting talks on a broader budget deal that could replace cuts to defense and domestic agency budgets with cuts to benefit programs like Medicare and reforms to the loophole-cluttered tax code. Curbs to "Obamacare" were not mentioned.
At the White House, Obama told House Democratic loyalists that he still would prefer a long-term increase in the nation's $16.7 trillion borrowing cap but said he's willing to sign a short-term increase to "give Boehner some time to deal with the tea party wing of his party," said Rep. Peter Welch, D-Vt.
A midday meeting Wednesday between the two top House Republicans and Democrats, meanwhile, yielded no progress. Rival aides to Boehner and Democratic leader Nancy Pelosi of California even disagreed over who asked for the meeting. Aides said Pelosi had a long-ignored request for a meeting with Boehner that Boehner unexpectedly granted on short notice.
Obama invited the entire House GOP to the White House on Thursday but Boehner opted to send a smaller squadron of about 20 mostly senior members, which prompted White House Press Secretary Jay Carney to issue an unusual statement criticizing the move to exclude tea party Republicans from the session.
"The president thought it was important to talk directly with the members who forced this economic crisis on the country about how the shutdown and a failure to pay the country's bills could devastate the economy," Carney said.
The frustrating standoff in Washington is weighing on each side's poll numbers, but Republicans are taking the worst drubbing. A Gallup poll put the approval rating for the Republican Party at a record-low 28 percent. Polls have consistently said the Republicans deserve the greater share of blame for the shutdown.
Also Wednesday, the House voted 252-172 to reopen the Federal Aviation Administration. Democrats generally opposed the measure and the White House issued a veto threat, saying the government should be reopened all at once, not piecemeal.
There was a brief moment of unity when the House voted 425-0 to let the Pentagon pay death benefits to the families of fallen U.S. troops.
That was a topic that drew the scorn of the Senate's surprisingly outspoken chaplain, Barry Black.
"When our federal shutdown delays payments of death benefits to families of children dying in faraway battlefields, it's time for our lawmakers to say, `Enough is enough,'" he said.
Controversy accompanied the subject.
Republicans said Congress had passed and Obama had signed legislation last week to permit the payments, but the Defense Department said otherwise. As Republican leaders were pushing toward a vote on the bill making it explicit, Defense Secretary Chuck Hagel announced a charity would pick up the death benefit costs instead.
"What they really need is someone to create a safe place for them to begin to talk about getting some of the issues resolved so they could at least begin to get the government going again," said Rocco Scanza, executive director of the Scheinman Institute on Conflict Resolution at Cornell University.
While the two sides are dug in, a mediator would focus on a bigger objective: allowing both sides to save face.
"Whether you want to call it a mediation or a discussion, a third party can help facilitate a discussion away from the fanfare, away from the noise," he said. "Get someone in the room who has the ability and the temperament to get folks to find common ground."
Think of it as negotiating a labor contract or a divorce settlement.
THE PRECEDENT: Obama and the GOP have shown few signs of compromise so far, but history suggests they will come together eventually. In the last government shutdown, in the mid-1990s, the two sides eventually reached a deal, and they did so again in 2011 to avert another possible shutdown.
"All disputes end. That's the one thing I know," said Scot Beckenbaugh, a veteran federal mediator who has helped resolve a number of high-profile disputes, including a four-month lockout that almost wiped out the National Hockey League season last year.
The current shutdown "will be over when the two parties want it to end," said Beckenbaugh, deputy director of the Federal Mediation and Conciliation Service. "Or when they need it to end (and decide) that the solution is better than the fight."
The 1995-96 shutdown, which also centered on a partisan dispute over spending, lasted 21 days and ended after President Bill Clinton and congressional Republicans agreed to a compromise budget plan.
That history offers hope that a solution can be found this time, said Julian Zelizer, a professor of history and public affairs at Princeton University. Shutdowns "are difficult and often very bitter, but they can be resolved through leadership," Zelizer said.
THE FIRST STEP: Getting the two sides to talk together. Often, a mediator will shuttle between the parties searching for clues of where there might be common ground
Start small and then move on to the bigger picture when trust is established.
For example, instead of focusing on long-term problems such as the national debt or overall spending, initial talks should focus on a short-term objective such as getting furloughed workers back on the job, Zelizer and others said.
"Maybe something as simple as putting people back to work, without assigning blame," Beckenbaugh suggested.
COMING TO GRIPS WITH REALITY: Bill Hoagland, a former Senate Budget Committee staff director and longtime GOP aide who was involved in talks that ended the 1996 shutdown, said each side must recognize its own limits.
"With all due respect to the president, you can't continue to say you won't negotiate" over a budget deal, said Hoagland, now a senior vice president at the Bipartisan Policy Center, a Washington think tank. "You can't say that forever."
At best, Obama and his party control two-thirds of the government, leaving House Republicans with crucial leverage, Hoagland said.
At the same time, Republicans and House Speaker John Boehner, R-Ohio, in particular "have to recognize that they are not going to defund or replace the Affordable Care Act. It's just not going to happen," Hoagland said.
Boehner "needs to recognize that he fought the good fight, and he should take the position, `OK, what can we get that is acceptable to our members?'" Hoagland said.
Zelizer agreed, although he said Boehner was boxed in by tea-party conservatives who were unlikely to accept concessions that do not dismantle the 2010 health care law.
COMPROMISE ISN'T A DIRTY WORD: A possible compromise could be on a GOP proposal to repeal a tax on medical devices. Republicans have sought the tax repeal as an interim step to delay or defund the new health care law supported by Democrats but so far have been rebuffed.
Agreement on the medical device tax, or some other issue such as spending cuts unrelated to health care, could go a long way to end the shutdown by allowing both sides to save face, Zelizer said.
"A small compromise has big political value because neither side is going to give in on the big issues," he said.
THE LOOMING THREAT AS LEVERAGE: Hoagland and others said the answer may lie in what comes next: a possible government default on U.S. debts, a first in the nation's history. The Treasury Department says that without congressional action it will run out of borrowing authority to pay the government's bills on Oct. 17.
The threat of default - and the economic catastrophe it almost certainly would bring - could be enough to persuade Democrats and Republicans to come together, Hoagland said.
The White House has signaled it would accept even a brief extension in borrowing authority to prevent an unprecedented default, while a defiant Boehner has said he will insist that Obama negotiate on changes to the 3-year-old health care law and spending cuts if he wants to end the shutdown and avert a default.
BRING IN HELP: Beckenbaugh, the federal mediator, said his agency typically focuses on labor-management disputes, but has intervened in land-use and law enforcement cases. Like other federal agencies, the mediation service has been hit by furloughs but continues to offer assistance where there is a threat to life, property or the public order.
"My guess is if we were to receive a call," he said, "I'm sure we would be more than willing to offer our services."