Obama meets with top lawmakers but no deal on shutdown

Susan Davis | USA TODAY

Show Caption Hide Caption GOP: Dems won't talk, Reid: Boehner won't listen House Speaker John Boehner told reporters Democrats "will not negotiate", while Democratic leaders say the House Speaker will not agree to discussions on a full-year budget or the debt ceiling. (Oct. 2)

President Obama met Wednesday with the top four congressional leaders

House Republicans again attempted piecemeal funding bills to fund popular government services

The shutdown could clash with an impending vote to raise the debt ceiling

WASHINGTON — On the second day of the government shutdown, Congress and the White House drew no closer to resolving the impasse, although President Obama and key congressional leaders held their first meeting to discuss the budget crisis Wednesday afternoon.

Obama met with top four congressional leaders at the White House for a meeting, where leaders reiterated their positions after the meeting: Democrats continue to seek a stopgap funding bill and a debt ceiling increase with no conditions attached, while Republicans continue to mount an effort to seek concessions on the health care law.

House Minority Leader Nancy Pelosi, D-Calif., said Republicans "keep moving the goal post" for reaching a deal. House Speaker John Boehner, R-Ohio, said Democrats "will not negotiate."

While they called the meeting cordial, earlier in the day Obama said he is "exasperated" by the shutdown and blamed Republicans for trying to "extort" a delay or defund of the health care law.

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

The White House said in a statement Wednesday evening that Obama stressed his view that the House should vote on the clean spending bill passed by the Senate, and that he would not negotiate over re-opening the government or raising the debt limit.

After meeting earlier Wednesday with Obama, leaders of major Wall Street financial firms joined in calling for a deal to end the shutdown and the uncertainty over the increase in the debt ceiling, which needs a congressional vote of approval by Oct. 17.

"While the government shutdown is unfortunate, the impacts of a debt default would be magnitudes worse and should not even be considered a viable option," said Lloyd Blankfein, CEO and chairman of the investment firm Goldman Sachs, in a statement.

"The economic damage associated with default or near-default would be severe and have serious consequences for the recovery of the U.S. and global economy," said Blankfein, who is also chairman of the Financial Services Forum, a group of financial and investment firms.

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The shutdown has also raised the stakes for national security, two of the nation's top intelligence officials told a Senate panel Wednesday.

"I've never seen anything like this,'' Director of National Intelligence James Clapper told the Senate Judiciary Committee. "The damage will be insidious as this goes on.''

Clapper said 70% of the civilian workforce had been furloughed as part of the shutdown, which the director said has "created a dreamland for foreign intelligence services to recruit'' U.S. personnel.

National Security Agency Director Keith Alexander said 4,000 computer scientists and 1,000 other scientists are among those furloughed.

Meeting request stirs war of words

Obama's request for a meeting, coupled with a letter by Senate Majority Leader Harry Reid to Boehner, opened a proxy fight between the various sides' spokesmen.

White House spokesman Jay Carney said the president is "attaching no partisan strings" to his request that Congress reopen the government. "What the president is asking Republicans in the House to do is quite literally the least they could do. He's asking them to extend funding at the levels set in the previous fiscal year to keep the government open."

Republicans want further negotiations said Brendan Buck, a spokesman for Boehner, an Ohio Republican. "It's unclear why we'd be having this meeting if it's not meant to be a start to serious talks between the two parties," Buck said.

Reid, D-Nev., sent a letter to Boehner Wednesday asking him to approve the Senate stopgap funding measure in exchange for a commitment to appoint senators to a committee to resolve longer-term budget issues. "This conference would be an appropriate place to have those discussions," Reid wrote.

The conference committee would attempt to resolve differences in the budget plans passed by the Senate, controlled by Democrats, and the Republican-led House. Senate Democrats have asked for such a committee since the spring, but were rebuffed by Republicans, who said their differences were too great for a conference. House Republicans offered to appoint members to a separate committee on the stopgap bill on Monday as the shutdown neared, which Senate Democrats rejected.

"The entire government is shut down right now because Washington Democrats refuse to even talk about fairness for all Americans under Obamacare," responded Michael Steel, a spokesman for Boehner, "Offering to negotiate only after Democrats get everything they want is not much of an offer."

Small spending bills

House Republicans moved forward again Wednesday with a legislative strategy to advance piecemeal funding bills to reopen popular parts of the federal government including parks and national memorials and the Department of Veterans Affairs until a broader budget agreement is reached. Measures to reopen the parks and the National Institutes of Health passed Wednesday evening, but face slim prospects of passing in the Senate.

Republicans continue to ask for a one-year delay in the requirement in the Affordable Care Act that uninsured Americans buy health insurance in exchange for passage of the funding bill.

The state- and federal-run websites where people can shop for and buy health insurance opened Tuesday. They have experienced more than 4.7 million visitors, which has also led the sites to crash or cause long waits.

Senate Democrats and Obama oppose the piecemeal approach and continue to call on Republicans to approve the Senate-passed stopgap funding bill through Nov. 15 that has no provisions affecting the health care law. Senate Majority Whip Richard Durbin, D-Ill., challenged Boehner to allow a vote on the bill, which appears to have the support to pass on the votes of Democrats and moderate Republicans.

"What is (Boehner) so afraid of?" Durbin said on the Senate floor.

Some House Republicans wavering

House Minority Leader Nancy Pelosi, D-Calif., has said she can deliver most of the Democrats' 200 House votes, and more than a dozen House Republicans have publicly said they would support a "clean" stopgap bill without provisions affecting the ACA.

One of those Republicans, Rep. Michael Grimm, R-N.Y., said he is working with a coalition of members and leadership to find a compromise. "I'm willing to do that and there are many members that are going to make that push," he told CNN's New Day.

Democrats on Wednesday tried to force shutdown-ending legislation to the floor, but it failed 227-197. All GOP members voted against it.

Republicans are looking for ways to pass the stopgap bill and negotiate with Senate Democrats on a vote to raise the debt ceiling, the nation's borrowing limit.

"There is a strong possibility, if (Democrats) were willing to at least sit down and listen to us, that we could put a package together to solve all of these problems at once so we can get the government funded, stop this shutdown and also deal with the debt ceiling so that we don't have another crisis a week or two away from now," Grimm said.

By 4 p.m., the list of Republicans who were either quoted in published reports or had released public statements online, particularly on Twitter, saying they would vote for a spending bill without limits on the Affordable Care Act, had risen to close to 20. But their influence is limited unless Boehner agrees to put the Senate bill up for a vote.

Obama and Reid have been equally insistent that they will not negotiate on the debt ceiling because of the economic risks posed by a default. However, the two budget deadlines overlap further with each day the government remains shut down.

Treasury Secretary Jack Lew advised Congress late Tuesday that he was exhausting the last measures before the debt ceiling is hit Oct. 17.

Senate GOP leaders said they'd like to resolve the two issues separately, but that it may not be possible. "Well, they are getting close to each other, aren't they? And I'd still like to resolve the current issue before we move on to the debt ceiling, but it's not exactly clear yet when that will be resolved," said Senate Minority Leader Mitch McConnell, R-Ky.

Contributing: David Jackson and Kevin Johnson.