Congressional leaders, Obama meet; still no shutdown deal

David Jackson | USA TODAY

WASHINGTON — President Obama told congressional Republicans on Wednesday he will not negotiate major budget issues until the government is re-opened and the debt ceiling is increased.

"The president remains hopeful that common sense will prevail, and that Congress will not only do its job to reopen the government, but also act to pay the bills it has racked up and spare the nation from a devastating default," said a White House statement.

The statement came shortly after Obama met with Republican and Democratic congressional leaders for 70 minutes at the White House.

Obama, who earlier in the day said he was "exasperated" by the shutdown, "made clear to the leaders that he is not going to negotiate over the need for Congress to act to reopen the government or to raise the debt limit to pay the bills Congress has already incurred," said the White House.

Republicans criticized Obama's refusal to negotiate in the short term.

House Speaker John Boehner, R-Ohio, who again called for a one-year delay of aspects of the new health care plan as part of a new spending plan, told reporters at the White House, "all we're asking for here is a discussion and fairness for the American people under Obamacare."

Senate Minority Leader Mitch McConnell, R-Ky., described the meeting with Obama as "cordial, but unproductive."

Senate Majority Leader Harry Reid, D-Nevada, who also met with Obama, echoed the president by saying that his chamber will negotiate with House Republicans on health care and other issues as soon as they vote to re-open the government.

Boehner "cannot take yes for an answer," Reid told reporters at the White House.

Earlier in the day, Obama blamed Republicans for shutting down the government, and trying to "extort" a delay and defunding of the health care plan.

"Absolutely, I'm exasperated, because this is entirely unnecessary," Obama told CNBC in an interview.

As some GOP members seek to delay or de-fund the health care law as part of a budget deal, Obama told CNBC that an "extremist wing" of one party should not be allowed to "extort" concessions in way that delays funding for much of the government.

During the meeting with congressional leaders, Obama again asked House Republicans to pass a new spending plan without any restrictions on the new health care law.

Boehner repeated his call for a one-year delay of some provisions of the Affordable Care Act.

Despite the differences, members of both parties called the White House meeting valuable. Boehner called it "polite," while House Democratic leader Nancy Pelosi, D-Calif., said it was "worthwhile."

In a statement, McConnell said, "while I appreciated the opportunity to speak directly with the President about this pressing issue, I was disappointed that he had little interest in negotiating a solution or in encouraging Senate Democrats to agree to the House request for a conference."

The partial shutdown of the government began at midnight Monday, when the Republican-run House and Democratic-run Senate failed to agree on a new spending plan.

The House has passed several versions of a spending bill that includes a delay in the health care law; Obama and Senate Democrats say that is unacceptable.

Republicans have called for a House-Senate conference committee to resolve the impasse. Democrats have refused, saying the GOP is trying to use the budget process to gut the new health care law.

Obama told congressional leaders that the House should vote on a "clean" spending plan with no new health care provisions, the White House said, and he predicted that such a bill "would pass a majority of the House with bipartisan support."

The White House statement said that "the House could act today to reopen the government and stop the harm this shutdown is causing to the economy and families across the country." It also said Obama "is glad that the leaders were able to engage in this useful discussion this evening."

The White House meeting also previewed another looming showdown over the $16.7 trillion debt ceiling, which the Treasury Department says it will hit on Oct. 17.

Without an increase in the debt ceiling, Obama has said the government will be unable to borrow money to repay its obligations, creating a default that will harm the economy worldwide. He also said he will not negotiate with the Republicans over the need to raise the debt ceiling.

In his CNBC interview, Obama said that "when you have a situation in which a faction is willing to potentially default on U.S. government obligations, then we are in trouble."

The president also said that Wall Street should be concerned about both the shutdown and the prospect of a default.

Earlier in the day, Obama discussed both the debt ceiling and the government shutdown in a mid-day meeting with the Financial Services Forum, a group of CEOs.

Afterward that meeting, Lloyd Blankfein, chairman and CEO of the Goldman Sachs Group, said it's fine for lawmakers to "litigate" political issues, but the debt ceiling should not be used a "cudgel" to seek concessions.

Failure to pay the nation's bills — default — would roil financial markets worldwide, and damage economic recovery in the United States, Blankfein said.

"There's a precedent for a government shutdown," Blankfein said. "There's no precedent for a default."