The US Senate has rejected a proposal to extend the debt ceiling through next year. Washington has just five days to reach an agreement or the US will, for the first time ever, go into a state of default.
On Saturday, the US Senate rejected a Democratic plan to raise the debt ceiling through 2014 after failing to gain the 60 votes needed to move the proposal forward.
In response to the rejection, White House press secretary Jay Carney released a statement saying, "Congress needs to move forward with a solution that reopens the government and allows us to pay our bills."
US President Barack Obama said Saturday that he wanted a long-term deal to prevent a federal default, despite previous comments that he would be open to a shorter six-week extension suggested by House Republicans.
"It wouldn't be wise, as some suggest, to just kick the debt ceiling can down the road for a couple of months, and flirting with a first-ever intentional default right in the middle of the holiday shopping season," Obama said in his weekly radio and video address.
The rejection of the 15-month extension means the negotiations have yet again stalled.
The current US debt ceiling of $16.7 trillion (12.36 trillion euros) is fixed until October 17. If Congress fails to raise the ceiling before then, the US will be unable to borrow additional money to pay down past debts. That would put the federal government in a state of default for the first time in its history.
Though raising the debt ceiling was standard procedure in the past, House Republicans - influenced by the conservative Tea Party caucus - have threatened not to increase the limit in order to gain negotiating leverage with the president over his signature health care reform law, the Affordable Care Act.
An amendment attached by House Republicans to the original spending bill for the fiscal year 2014 would have defunded key provisions to the law, also known as Obamacare. The Democrat-controlled Senate axed the amendment, sending a "clean" version of the bill back to the House.
Republicans have argued for any budget deal to include concessions on funding Obamacare.
The president has insisted that he will not make concessions to Republicans who are trying to use the government shutdown and debt ceiling as leverage.
"Manufacturing crises to extract massive concessions isn't how our democracy works, and we have to stop it. Politics is a battle of ideas, but you advance those ideas through elections and legislation - not extortion," Obama said in his weekly radio and Internet address Saturday.
Meanwhile, the Statue of Liberty, the Grand Canyon and Mount Rushmore will soon reopen to visitors after deals were on the three famous landmarks despite the government shutdown.
hc/mkg (Reuters, AFP, AP, dpa)
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