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Obama vs. Boehner: Government shutdown, debt limit stalemate continues

Eight days into the government shutdown, President Obama and House Speaker John Boehner, R-Ohio, on Tuesday dug their heels further into their respective positions, insisting the other side has to budge first.

Mr. Obama said he's willing to negotiate with Republicans over anything, but only after they allow Congress to re-open the government and raise the debt limit to end the threat of default. Even if Congress only managed to re-open the government for another six-weeks, Mr. Obama said he'd "absolutely" be willing to negotiate after that.

"I will not eliminate any topic of conversation, and I've shown myself willing to engage all the parties involved, any leader on the issue," Mr. Obama said from the White House press briefing room. "The only thing I will say is that we're not going to pay a ransom for America paying its bills. That's something that should be non-negotiable."

Shortly after the president spoke, Boehner insisted, "The long and short of it is there's going to be a negotiation here."

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Obama: No more "rabbits in our hat" to pay U.S. debts
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"At times like this the American people expect their leaders to sit down and have a conversation. I want that conversation to occur now," he said. "What the president said today was if there's unconditional surrender by Republicans, he'll sit down and talk to us."

The government shut down on Oct. 1 after Washington found itself incapable of overcoming partisan disagreements. The stalemate stems from the Republican Party's insistence on dismantling or delaying parts of the Affordable Care Act as part of these fiscal policy matters. In addition to passing a spending bill, Congress must raise the debt limit by Oct. 17 or risk letting the nation default on its loans.

The president slammed the conservative members of Congress who are using government operations and the threat of default as bargaining chips, remarking, "The greatest nation on Earth shouldn't have to get permission from a few irresponsible members of Congress every few months just to keep our government open."

Boehner, meanwhile, said, "We can't raise the debt ceiling without doing something about what's driving us to spend more money and live beyond our means." He argued there's a long history in Washington of using the debt limit to bring about policy changes.

Mr. Obama said that the current gridlock is hurting America's standing in the world, noting that he has missed critical meetings in Asia because of the government shutdown and the looming threat of default. This level of political dysfunction, he said, "hurts our credibility around the world. It makes it look like we don't have our act together, and that's not something we should welcome."

The president argued that Boehner could end the government shutdown immediately by putting a no-strings-attached spending bill up for a vote on the House floor. Until Boehner does that, Mr. Obama said, "there's going to be a cloud over U.S. economic credibility."

Passing a no-strings-attached bill would take a bipartisan vote. As of now CBS News estimates that 214 House members, including all Democrats and 14 Republicans, would support such a bill -- meaning the votes are almost there, but not quite.

With no end to the stalemate in sight and in a bit of theatrics, Senate Majority Leader Harry Reid, D-Nev., on Tuesday called for all members of the Senate to report to the floor, in order to initiate an open conversation about the importance of solving these issues. Once on the floor, Reid called the shutdown "an embarrassment to our nation." He noted the significant impact it has had on government services; for instance, the Pentagon says it no longer has authority to pay death gratuities to the survivors of servicemembers killed in action.

"The families of five U.S. servicemembers who were killed over the weekend in Afghanistan have been notified that they won't receive their benefits," Reid said. "The families who lost five loved ones, it's an unbearable loss, but now they're being denied death benefits because of this senseless shutdown. It's shameful and embarrassing, there are no words to describe this situation."

Earlier in the day, Reid pointed out Democrats have already made a major concession to Republicans by agreeing to the low spending limits that the GOP wanted. "He can't take yes for an answer," Reid said, referring to Boehner. "I don't know what else is left to talk about. All we're asking is that government be re-opened."

Still, Senate Minority Leader Mitch McConnell, R-Ky., said on the Senate floor that Democrats must take Republican demands seriously.

"We now have divided government it means that we have to talk to each other and get to an outcome," he said. "I think it's far past time to get that done, and I hope given where we are today that there is adequate incentive to get those talks started principally between the majority leader and the speaker to get us to the outcome that we all want and to get us there soon."

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While the shutdown has had negative impacts, the consequences of failing to raise the debt limit would be far greater, Mr. Obama warned Tuesday. The Treasury Department has told Congress that it has until Oct. 17 to do so before the U.S. risks defaulting.

A few Republicans in Congress, however, have downplayed the impact of defaulting. Mr. Obama on Tuesday called this "irresponsible, out of touch with reality, and based on a flawed analysis of how our economy works."

If the nation defaulted, every American could see their 401k and home values fall while borrowing costs for mortgages and loans would rise, he said, running the "risk of a very deep recession."

Mr. Obama refused to even entertain a question about what financial obligations the nation would prioritize if the Treasury ran out of enough money to pay them all.

"I am going to continue to be very hopeful that Congress does not put us in that position," he said. "No option is good in that scenario."

Some have suggested the Treasury could keep interest rates from soaring by paying bondholders, even if that meant forgoing payments to other obligations like Social Security. Mr. Obama rejected that theory.

"If the markets are seeing we're not paying all our bills on time, that will affect our credit worthiness," he said. "There's no silver bullet, there's no magic wand that allows us to wish away the chaos that could result if, for the first time in our history, we don't pay our bills on time."