By Richard Cowan and Thomas Ferraro
WASHINGTON Oct 8 U.S. Senate Democrats plan to
introduce a bill this week to raise the government's borrowing
authority by enough to last through 2014 in an effort to avoid a
fiscal default that could have a disastrous economic impact.
The measure, which must be discussed among Senate Democrats
at a luncheon meeting on Tuesday, would not contain any of the
deficit reductions that Republicans have demanded, a Senate
Democratic aide said.
Both sides are searching for a way to resolve a fiscal
standoff that has shut down the federal government for eight
days, with a critical date for raising the country's $16.7
trillion borrowing limit approaching in nine days.
House of Representatives Speaker John Boehner, a Republican,
renewed his call for deficit-reduction talks with President
Barack Obama, saying he was not "drawing any lines in the sand."
"It's time for us to sit down and have a conversation,"
Boehner told reporters after meeting with Republican House
members. "There are no boundaries here. There's nothing on the
table, there is nothing off the table."
Republicans emerged from the House meeting saying they would
insist that deficit-reduction talks with Obama as a condition
for raising the federal debt limit.
A senior House aide said Republicans are considering
legislation to create a new panel to find deficit reductions
similar to a failed 2011 "supercommittee" of Republicans and
Democrats from the House and Senate that was asked to find
trillions of new budget savings.
House Democrats, speaking to reporters, said they would
reject the creation of such a panel. They want the government to
reopen and the debt limit raised before entering any
The chief economist at the International Monetary Fund said
on Tuesday a default by the United States would likely lead to a
recession, dramatic cuts in government spending, and a "a lot of
"I think what could be said is if there was a problem
lifting the debt ceiling, it could well be that what is now a
recovery would turn into a recession or even worse," IMF chief
economist Olivier Blanchard said.
The Senate Democratic aide said Democrats were hopeful they
could get the 60 votes needed to overcome procedural hurdles in
the 100-member Senate and pass a debt ceiling bill with no
The measure would likely run into opposition from Senate
Republicans such as Ted Cruz of Texas, who has been leading the
drive to make delaying Obama's healthcare law a condition for
raising the debt ceiling.
Considering the procedural roadblocks it could face, aides
said they need to begin work on the legislation well before Oct.
17, when Treasury Secretary Jack Lew has said the government
will run out of borrowing authority.
Obama and his fellow Democrats have stepped up their
criticism of Boehner for refusing to schedule a House vote on a
separate unencumbered measure to fund the government and end the
shutdown. They believe it would pass with most Democrats in the
House voting for it along with a handful of Republicans. Boehner
said Sunday that it would fail.