Politics
3:17 am
Thu October 3, 2013

Day 3 Of Shutdown: Both Sides Remain Dug In

Originally published on Thu October 3, 2013 10:53 am

Transcript

STEVE INSKEEP, HOST:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne.

The nation has grown accustomed to political crisis manufactured in Washington.

INSKEEP: Americans and their leaders are less accustomed to the situation now. The drama leading up to the deadline for a government shutdown was familiar.

MONTAGNE: But now that Congress has blown far past that deadline, it's not clear how long it will take for the two sides to find a way out. Last night, President Obama invited the top four congressional leaders to the White House for a chat.

NPR's national political correspondent Mara Liasson reports.

MARA LIASSON, BYLINE: The meeting at the White House had the same down the rabbit hole quality of the entire government shutdown. The Democratic and Republican leaders of Congress huddled with the president in the Oval Office for more than an hour. Afterwards, Speaker Boehner said they had had a nice conversation but its wasn't what he was looking for.

REPRESENTATIVE JOHN BOEHNER: You know, at times like this, the Americans people expect their leaders to come together and to try to find ways to resolve their differences. The president reiterated one more time tonight that he will not negotiate.

LIASSON: Then Senate Majority Leader Harry Reid emerged to repeat the Democrats' unwavering position: Open the government, then we'll talk. President Obama said the talks were useful but he stuck to his line in the sand.

Here he is on CNBC.

(SOUNDBITE OF CNBC BROADCAST)

PRESIDENT BARACK OBAMA: The message I have for the leaders is very simple: As soon as we get a clean piece of legislation that reopens the government - and there is a majority for that right now in the House of Representatives, I suspect...

UNIDENTIFIED MAN: No negotiation until after that?

OBAMA: Until we get that done, until we make sure that Congress allows Treasury to pay for things that Congress itself already authorized, we are not going to engage in a series of negotiations.

LIASSON: There is some hope that the non-negotiations could now explore possible face-saving ways for the Republicans to back down. Bill Hoagland, who was a top Republican budget staffer during the last government shutdown, thinks repealing one of the funding sources for Obamacare - a tax on medical devices - could help solve the crisis.

BILL HOAGLAND: You have to take into consideration the capital that's been expended already on the House side. And that suggests to me that there has to be some sort of fig leaf, if nothing else. I think that something like the medical device tax is something that the Republicans could claim some victory on, if the president was willing to accept it. And that seems to be somewhat bipartisan.

LIASSON: But whether the goal is something small and face-saving like the repeal of the medical device tax, or another attempt at the grand bargain the president and the speaker have tried and failed to reach in the past, it's still a long way before any resolution. In the political life cycle of a government shutdown, this is just the beginning.

Budget expert Stan Collender says the public reaction to government shutdowns starts slowly, then builds.

STAN COLLENDER: The political pain of the shutdown is going to get worse every day. This is what happened in the '95-'96 shutdown, is that after about seven days, government contractors, subcontractors and people who do business with the government indirectly - the coffee shop across from an IRS office in Fresno, for example - all started to feel the pain. That was when the politics started to change. That was when the voters back home said: OK, we're no longer amused, fix this.

LIASSON: And very soon the fight over the shutdown will get rolled into the next Armageddon deadline. The government runs out of borrowing authority on October 17th. The president met with Wall Street executives yesterday and told them to be worried, very worried, about a default. One of the executives was Lloyd Blankfien, the chairman of Goldman Sachs, who said a default would be a catastrophe.

LLOYD BLANKFIEN: There's precedent for a government shutdown. There's no precedent for a default. We're the most important economy in the world. We're the reserve currency of the world. Payments have to go out to people. So we really haven't seen this before, and I'm not anxious to be a part of the process that witnesses it.

LIASSON: Wall Street's growing realization that there could actually be a default, coupled with the public's growing frustration over the shutdown, is the kind of pressure both parties see as leverage for them. And they're counting on those pressures to force the other side to blink, even though neither one is ready to right now.

Mara Liasson, NPR News, the White House. Transcript provided by NPR, Copyright NPR.