US debt: Truce in sight as Senate leaders work on compromise ahead of Thursday's deadline
China calls for 'de-Americanized world' not dependent on the dollar as a reserve currency
With the clock ticking down fast, frantic behind-closed-doors efforts were accelerating on Monday in Washington to craft a stop-gap fiscal package temporarily to reopen the government and authorise an increase in America’s debt ceiling before Thursday when the US Treasury expects to run out of cash to meet all its obligations.
There were growing signs that Democrat Senator Harry Reid, the Senate majority leader, and his Republican counterpart, minority leader Mitch McConnell, were marshaling their troops towards a package that offered face-saving tidbits for both sides while ensuring that funding for the government would be restored until mid-January next year and the authority for the US to raise the debt ceiling would be extended through the middle of February.
While it was unlikely the two Senate leaders would forge a deal without being confident it would pass in their chamber, its fate in the House of Representatives remained uncertain with the right flank of the Republican Party certain to rebel if there is any sense their party had been forced to retreat. A Senate deal, if approved, would probably be put to the full House for a vote by speaker John Boehner as early as today or Wednesday.
After sliding early on Monday, markets picked up on fresh word that a truce was at last in sight. Senator Reid opened a Senate session saying he was “very optimistic we will reach an agreement this week that’s reasonable in nature”. Mr McConnell suggested in his own comments that he concurred saying they had had a “couple of very useful discussions”. The Dow Jones industrial average added 64.15 points, or 0.4 percent, to close at 15,301.26
The partial shutdown has now entered a third week, with 350,000 federal workers on furlough without pay, while Thursday remains the deadline for an agreement to be struck on raising the debt ceiling without which the US could risk a first-ever default on its debt. The deal taking shape appeared to be a big retreat for Republicans, who have seen public opinion turn sharply against them. Some on the right flank had wanted to use the crisis to pare back or even hobble Mr Obama’s healthcare reforms.
Visiting a local Washington food bank charity, Martha’s Table, Mr Obama struck a cautiously optimistic note. “My hope is that a spirit of cooperation will move us forward over the next few hours,” he said. “If we don’t start making some real progress both in the House and the Senate, and if Republicans aren't willing to set aside some of their partisan concerns in order to do what's right for the country, we stand a good chance of defaulting."
In a vivid illustration of how the squabbling on Capitol Hill has implications far beyond the Washington beltway and indeed America’s borders, an impatient China, which holds more American debt than any other nation, called for a ‘de-Americanized world’ where the dollar is no longer the chosen international reserve currency.
The case was made in a sharply worded editorial published by the official Xinhua news agency. “As US politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” it said.
With global growth barely returning after the 2008 crash, including in the Eurozone the political crisis here could hardly be coming at a less helpful time At the weekend the head of the IMF, Christine Lagarde, warned sternly of the "risk of tipping, yet again, into recession” if solutions are not found this week.
The broadside by Xinhua, which usually represents the views of the Beijing government, was all the more striking because it went beyond even the “pernicious impasse” on the fiscal dossier taking advantage of the crisis to take Washington to task also for taking “the moral high ground” in world affairs while “covertly doing things that are as audacious as torturing prisoners of war, slaying civilians in drone attacks, and spying on world leaders”.
- 1 Revolutionary lost Caravaggio painting 'Mary Magdalen in Ecstasy' identified
- 2 McKamey Manor: This 'extreme' haunted house is the stuff of nightmares
- 3 Russell Brand says he will 'probably' give up acting to focus on his revolution
- 4 Watch what happened when food critics were unknowingly served McDonald's
- 5 David Beckham's Haig Club whisky is exactly what’s wrong with the Highlands
Renee Zellweger on plastic surgery rumours: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Eleven members of same family hospitalised after eating deadly pufferfish
FCKH8: YouTube reinstates provocative anti-sexism video showing young girls swearing
Phone-hacking: The Piers Morgan connection - Mirror admits some stories during Morgan's tenure may have been obtained by illegal means
Russell Brand says he will 'probably' give up acting to focus on his revolution
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Attacks on 'Ukip Calypso' show how skewed people’s priorities are
Poppy Appeal 2014: This is why I won't be wearing a red poppy this year
£110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...
£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...
£30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...
£35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...