US Debt Ceiling Talks at Deadlock as Default Looms
The effort of US republicans in the House of Representatives to end the shutdown and extend the Treasury's borrowing authority collapsed Tuesday night.
The world's richest and most powerful country is getting closer to a default after Republicans left the Capitol without further plan or explanation Tuesday evening.
"We are done for the night," a weary Majority Whip Kevin McCarthy (R-Calif.) is quoted in saying by the Washington Post as he left a marathon session in the office House Speaker John Boehner (R-Ohio).
Senate leaders, however, are still voicing "optimism" that they could reach agreement to advance an alternative proposal that would raise the debt limit through February 7 and end the government shutdown, which is now in its third week.
The Senate's negotiations were initially put on hold on Tuesday to give House Republicans a chance to come up with a deal.
But their efforts ended in chaos when two proposals flopped, after Boehner failed to rally fractious Republicans behind either of them, forcing the leadership to scrap plans for a vote.
However, even if a compromise can overcome procedural hurdles, it remains unclear whether it could muster enough votes in the Republican-led House to pass before the October 17 deadline, The BBC reminds.
Politicians, bankers and economists have warned of global economic consequences unless an agreement can be reached.
Democratic Senator Barbara Mikulski has told her colleagues that the US was "hours away from becoming a deadbeat nation, not paying its bills to its own people and other creditors."
Amid the legislative chaos, the Fitch credit agency warned it could downgrade the US government's AAA rating, while the Dow Jones index ended the day down 133 points.
The USD 16.69 T debt ceiling was reached in May. The deadline to raise it is October 17.
Meanwhile, hundreds of thousands of federal employees have been out of work over the government shutdown, and private firms, from arms makers to motels, have begun to lay off workers.
The first in 17 years shutdown began after the budget vote failed because Republicans had as condition for their support defunding or delaying President Barak Obama 2010 healthcare law.
The stalemate has harmed the approval ratings of both Democrats and Republicans, but the Republicans' popularity has taken the worst hit and is now at a record low of 28%, according to a Gallup poll cited by The BBC.
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