- POSTED: 11 Oct 2013 22:31
This graph is an experimental feature that tracks number of views over time.
A glimmer of hope for a breakthrough flickered on Friday in the fiscal impasse which has crippled Washington and threatened serious damage to the global economy.
WASHINGTON: A glimmer of hope for a breakthrough flickered on Friday in the fiscal impasse which has crippled Washington and threatened serious damage to the global economy.
After more than a week of deadlock, something positive emerged on Thursday when Republicans offered President Barack Obama a short-term extension of the US government's borrowing authority, so as to stave off a possible debt default.
In the process, they spurred a bumper day on Wall Street and Asia reacted well on Friday, too. Shares in Tokyo rose 1.48 per cent, and stocks were also up in Sydney, Seoul and Hong Kong and elsewhere.
Signs of movement coincided with a new poll showing Americans have developed a sharply negative view of congressional Republicans during a crisis which has also partially shuttered the US government since October 1.
Republican leaders presented their plan to President Barack Obama at the White House -- and in a departure from recent bad tempered encounters, both sides described the meeting as useful and constructive.
The White House said Obama would be open to the Republican proposal for a six-week extension to the $16.7 trillion debt ceiling -- though would prefer longer.
The sticking point appears to lie in the Republican Party's request for Obama to open talks on a budget deal as a condition for reopening the government.
Obama says he will only discuss long-term budget issues once the government returns to work and hundreds of thousands of federal employees are back at their desks.
After 90 minutes of talks at the White House, House Republican Party second in command Eric Cantor offered an unusually upbeat assessment to reporters.
"It was a very useful meeting, we had a constructive conversation," Cantor said, adding that both sides would consider their positions and get back together to talk into the night leading from Thursday into Friday.
The White House, sensing victory and keen to drive a hard bargain, was more measured, making clear that Obama was still seeking a deal that would both reopen the government and extend the debt ceiling.
"After a discussion about potential paths forward, no specific determination was made," a statement said.
"The President looks forward to making continued progress with members on both sides of the aisle."
For the first time, it seemed that both sides were seeking an end to the crisis, which even led to the suspension of death benefits to families of soldiers killed on duty.
Late Thursday, Obama signed into law a bill reinstating the payments, marking the end of a deeply embarrassing development for the administration, feuding lawmakers and the Pentagon.
If the US debt ceiling is not raised by October 17, the Treasury would run out of money and could begin defaulting on US obligations for the first time in history, with likely dire consequences for the world economy.
New signs of Republican flexibility may have been spurred by devastating polling numbers showing their party brand badly hurt by the political showdown.
An NBC News/Wall Street Journal poll showed 53 per cent of those asked blamed Republicans for the government shutdown and only 31 per cent pinned the blame on Obama.
Some 70 per cent of those polled blamed Republicans for putting their political agenda before what was good for the country, compared to 51 per cent who said the same of Obama.
The polling numbers were particularly worrying for House leaders as they seek to cement their control of the chamber, the only branch of government Republicans control, in mid-term elections next year.
They may also give Republican powerbrokers, who have struggled to control the fractious Tea Party conservative wing of their caucus, ammunition to call a short term truce with the Democratic president.
Hopes for a possible deal sparked optimism on Wall Street.
The Dow Jones Industrial Average shot up more than 300 points or 2.2 per cent and the tech-heavy Nasdaq exchange was also up two per cent.
Earlier, Treasury Secretary Jacob Lew warned that a US default would cause economic chaos.
"If Congress fails to meet its responsibility, it could be deeply damaging to the financial markets, the ongoing economic recovery, and the jobs and savings of millions of Americans," Lew told the Senate Finance Committee.
Other countries were closely watching the unfolding crisis, fearful of reverberations in their economies.
Gang Yi, deputy governor of China's Central Bank warned that Washington should have the "wisdom" to overcome the gridlock as soon as possible.
"The market doesn't like uncertainty and we watch that drama very closely," he said, speaking in a CNN-hosted panel discussion on the sidelines of the IMF/World Bank annual meetings in Washington.
China is the largest foreign holder of US government debt.
IMF chief Christine Lagarde said a six to eight-week temporary debt limit extension would be welcome but "much longer would be a lot better" for the world economy.
Haruhiko Kuroda, governor of the Bank of Japan, said in New York meanwhile that he did not expect a US debt default.
Republican lawmakers said reaction in the party caucus to Boehner's plan was mixed.
"What the speaker is trying to do is just to get this man to sit down and talk to us," said congressman Lou Barletta, referring to Obama.
Over in the Senate, Republican Rob Portman predicted that after days of posturing by both sides, progress was at hand.
"I think there is a light at the end of the tunnel here," he said.