* Focus turns to Senate negotiations
* Talks seen continuing into early next week
By Thomas Ferraro and Tim Reid
WASHINGTON, Oct 12 (Reuters) - Hopes for an immediate
resolution of Washington's fiscal crisis faded on Capitol Hill
on Saturday as angry House of Representatives Republicans
accused President Barack Obama of shutting down negotiations
with them and turning to the Senate.
Congress was racing against a Thursday deadline to extend
U.S. borrowing authority and as Obama ratcheted up pressure on
lawmakers to end a partial government shutdown. Hundreds of
thousands of federal workers have been furloughed since Oct. 1
when lawmakers failed to reach agreement to fund the government.
In a sign of intensifying negotiations in the Senate,
Democratic leader Harry Reid and Republican leader Mitch
McConnell were holding talks on Saturday after a chilly period.
"Senator Reid and Senator McConnell are talking to each
other for the first time and that's good," Republican Senator
Roy Blunt told reporters.
Even if senators craft a proposal to end the government
shutdown and raise the debt ceiling, at least some Republican
support will be needed to pass it in the House. That support is
far from guaranteed, especially if the Senate deal does not
include any new attacks on Obama's health care reform law.
After two days of House Republicans talking in positive
terms about Obama and their chances for a deal, the bubble burst
House Republicans, after a closed meeting with their
leaders, emerged angry, accusing the White House of rejecting
their ideas and refusing to negotiate with them.
"I guess they're talking to the Senate now," a dejected
House Appropriations Committee Chairman Harold Rogers told
"There is no deal; no negotiations going on," House Speaker
John Boehner told a meeting of Republican lawmakers, according
to Representative Richard Hudson.
The White House had expressed deep reservations with
Boehner's plan for a debt ceiling increase that would have
extended only to Nov. 22 and other demands that would have
required a series of negotiations to continue under the threat
of debt default and government shutdown.
A senior House Republican aide said it was unlikely that
Republican leaders will craft another proposal and submit it to
Obama, now that the focus has shifted to the Senate.
The aide, who asked not to be identified, added that if
global financial markets open the week on an overly pessimistic
note, that could speed up efforts to bring some sort of
legislation to the House floor quickly.
ON THE SENATE SIDE
Meanwhile, the private talks on the Senate side of the
Much attention focused on a plan written by Senator Susan
Collins, a moderate Republican from Maine. It would fund
government operations for another six months at their current
level and extend Treasury Department borrowing authority through
After a meeting of some Senate Republicans, Collins told
reporters she hoped her plan "leads to a smart conversation that
brings an end to this." She said she had not yet spoken to
Boehner about it, focusing on her fellow senators for now.
But Collins' plan still had a way to go if it is to become a
deal. Thorny issues remained, one Senate Republican source said,
as Democrats were pushing for a slightly higher spending level
and some Republicans wanted a yearlong spending bill, instead of
Collins' plan also faced early headwinds in the House.
"I don't like it," House Budget Committee Chairman Paul Ryan
said, adding it had too many problems to list.
Representative Peter King said House Republicans felt it
would push a budget showdown too far down the road and would rob
them of more chances to attack Obamacare anytime soon.
But with every passing day, according to opinion polls,
Americans' patience seemed to be wearing thinner with
Republicans tactics that led to the government shutdown,
enhancing prospects of a deal.
Without action by Congress, the United States could be in
default by Thursday, when the Treasury warns its borrowing
authority would basically be exhausted.
Many House members were heading to their home districts,
having been informed that there would be no votes on Saturday,
Sunday or before Monday evening.
The complications have deflated hopes for a quick agreement
coming as early as this weekend.
"I was optimistic yesterday morning," David French, the
chief lobbyist for the National Retail Federation, told Reuters
on Saturday. "I'm a little less optimistic today and so are
folks I've talked to" on Capitol Hill.
Companies and trade associations have been stepping up their
efforts on Capitol Hill as the debt ceiling deadline approaches.
Retailers are particularly concerned about going into a
holiday season with debt ceiling jitters hanging over the
Beyond that, French said: "They're concerned about
Washington. They're concerned about the level of dysfunction.
Our members do not like lurching from crisis to crisis without
hope of a resolution."
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