Boehner, White House harden stances as shutdown continues, potential default nears.

"Nothing good" will come if Congress fails to raise the debt ceiling, Treasury Secretary Jack Lew warned, calling on House Speaker John Boehner to "give the majority a chance to vote."

House Speaker John A. Boehner on Sunday defiantly rejected calls to reopen the government and raise the federal debt limit, warning that the nation is headed for a first-ever default unless President Obama starts negotiating with Republicans.

“That’s the path we’re on,” Boehner (R-Ohio) said on ABC’s “This Week.” Of Obama, he added: “He knows what my phone number is. All he has to do is call.”

Sitting for his first television interview since congressional gridlock shut down most federal agencies nearly a week ago, Boehner sought to dispel the perception that he has been cornered by right-wing rebels and is desperately looking for a way out. In recent days, rank-and-file Republicans have said Boehner has told them he will not let the nation default on its obligations, even if that means raising the nation’s borrowing limit primarily with Democratic votes.

On Sunday, Boehner said he has no intention of collapsing in unconditional surrender. “We are not going to pass a ‘clean’ debt-limit increase” — one without additional concessions from Democrats — he said.

“I told the president, there’s no way we’re going to pass one. The votes are not in the House to pass a clean debt limit,” Boehner said. “And the president is risking default by not having a conversation with us.”

As Boehner hardened his stance, the White House did the same, dispatching Treasury Secretary Jack Lew to appear on four of the six major Sunday talk shows. Repeatedly, Lew said Obama is willing to enter negotiations to address the nation’s long-term budget problems but not until Republicans drop their campaign against Obama’s health-care initiative, end the government shutdown and lift the $16.7 trillion debt limit.

“We just spent the last several months with Congress creating this ridiculous choice where either you repeal the Affordable Care Act or you shut down the government or default on the United States. That is not the way we should do business,” Lew said on “Fox News Sunday.”

Republicans “need to open the government. They need to fund our ability to pay our bills,” Lew said. “And then we’re open to negotiation.”

The standoff leaves a shuttered Washington hurtling toward a potentially devastating deadline on Oct. 17, when Lew has said he will exhaust available measures to conserve cash and begin relying entirely on incoming revenue.

Lew ducked questions Sunday about whether that means the nation would immediately default. He said that he cannot predict when he will run short of cash to make required payments and warned that lawmakers are “playing with fire” if they do not act fast to grant him additional authority to borrow.

Independent analysts have offered a more specific timetable, saying default is likely no later than Nov. 1, when the Treasury Department is scheduled to make nearly $60 billion in payments to Social Security recipients, Medicare providers, civil-service retirees and active-duty military service members.

“I see no way Treasury could make the obligations of that day” without additional borrowing authority, said Nancy Vanden Houten, a senior analyst at Stone & McCarthy Research Associates who studies the Treasury Department’s borrowing needs.

A daily outflow of that size is unusually large, Vanden Houten said, occurring only when the third of the month falls on a weekend. The third of the month is when the Treasury Department cuts the largest of four monthly rounds of Social Security checks. Those payments must be shifted to the last business day before they are due — in this case, Friday, Nov. 1, when the department is already facing a stack of other obligations.

Some Republicans argue that missing such routine payments would not amount to a governmental default. They say that would occur only if the Treasury Department fails to make interest payments to investors.

But that could happen as soon as Oct. 31, when the department is due to pay out $6 billion in interest — making this Halloween especially scary.

“If they’re running low, that would really be the first time it’s plausible that they would be in jeopardy of not being able to make an interest payment,” Vanden Houten said.

In the meantime, the Treasury Department must roll over — or replace — billions of dollars in existing debt that has reached its maturation date. Investors are already demanding slightly higher rates on bonds that mature at the end of October. If anxiety over the debt limit intensifies, or if the United States begins to miss payments, analysts fear that investors could jack up rates dramatically, adding billions to federal budget deficits. Or they could stop showing up at Treasury auctions, an unprecedented outcome that could trigger panic in global financial markets.

Last week, the Treasury Department issued a report on debt-limit “brinksmanship” that said default “has the potential to be catastrophic: credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”

Even if the Treasury Department was able to keep paying investors, its overall injections of cash into the economy would fall dramatically until the debt limit was lifted. In a memo this weekend, Goldman Sachs economists predicted that missed federal payments could knock as much as 4.2 percentage points off gross domestic product, leading to “a rapid downturn in economic activity.”

Asked Sunday whether he agreed with such dire predictions, Boehner said yes. Senior GOP policy aides are scrambling to come up with options to suspend the debt limit that fall short of outright capitulation.

Among the options: A short-term suspension, perhaps no longer than six weeks, designed to force Obama to the bargaining table. But some Republicans argue that even a short-term suspension should come with strings attached.

A larger problem for Republicans appears to be figuring out what it is they want from the administration. Senior GOP aides acknowledge that their debt-limit bill, with its wish list of far-flung conservative initiatives, is dead. And while Sen. Ted Cruz (R-Tex.) and his allies on the right continue to call undermining Obamacare their top priority, Boehner made no such demands Sunday.

In the ABC interview, Boehner tacitly acknowledged making a deal with Senate Democrats to avoid using the threat of a shutdown to attack Obamacare in exchange for an agreement to maintain the deep cuts known as the sequester through the fall. He conceded that his rank and file forced him onto the path to shutdown by insisting on waging the fight over Obamacare.

“Working with my members, they decided, ‘Well, let’s do it now,’ ” he said.

Since the shutdown took effect, Boehner and his top lieutenants, along with senior Republicans in the Senate, have been trying to snuff out that fight and shift the debate toward more achievable goals, such as overhauling the tax code and trimming the soaring cost of federal health and retirement programs.

House Budget Committee Chairman Paul Ryan (R-Wis.) and Ways and Means Committee Chairman Dave Camp (R-Mich.) have been leading efforts to craft a “down payment” on reducing the debt that, in addition to tax reform, could include roughly $600 billion in cuts to entitlement programs, such as using a less generous measure of inflation to trim Social Security cost-of-living adjustments.

As an inducement to Democrats, Republicans said, such a package might also include partial replacement of the sequester cuts, which were curtailing federal services long before last week’s shutdown.

But Boehner on Sunday flatly ruled out new taxes, a top priority for Democrats.

Meanwhile, relations among congressional leaders — as well as the White House — are now so frosty, it’s hard to see how such sensitive talks could even begin.

“There may be a back room somewhere,” Boehner said. “But there’s nobody in it.”

Paul Kane contributed to this report.

Lori Montgomery covers U.S. economic policy and the federal budget, focusing on efforts to tame the national debt.
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