Obama Repeats No-Talks Stance as Democrats Plan Debt Bill
Comment of the Day

October 07 2013

Commentary by David Fuller

Obama Repeats No-Talks Stance as Democrats Plan Debt Bill

Here is the opening from one of Bloomberg's latest reports on this political impasse that is influencing markets
President Barack Obama reiterated that he won't negotiate with Republicans over the partial government shutdown and the U.S. debt limit as Senate Democrats began preparing for a test vote on a clean debt-ceiling bill.

Many U.S. government services have been shuttered for a week and the country is 10 days away from running out of borrowing authority. Republicans are insisting on changing the 2010 Affordable Care Act, while Obama refuses to engage in discussions about policy conditions tied to reopening the government or raising the debt limit.

"We're not going to negotiate under the threat of economic catastrophe," Obama said today during a visit to the Federal Emergency Management Agency in Washington.

Senate Democrats are considering a strategy that would allow Obama to raise the debt ceiling without requiring any Republican to vote in favor of a debt-limit increase, said Senator Richard Durbin of Illinois, the second-ranking Democrat. A test vote on the proposal could occur as soon as Oct. 11 as the debates over the government shutdown and the debt limit have merged.

Washington 'Paralyzed'

"Washington remains paralyzed in a staring contest with neither side appearing to blink anytime soon, and it seems highly likely that the federal government will stay closed through the week," said Chris Krueger, a Washington analyst for Guggenheim Securities LLC.

Signaling Republicans are losing political ground during the standoff, an ABC News/Washington Post poll showed 70 percent disapprove of Republicans' handling of the budget impasse, up 7 percentage points from a week ago. Fifty-one percent disliked Obama's approach, little changed from earlier.

David Fuller's view The USA's government impasse is now dominating short-term sentiment towards stock markets. This is creating both risks and opportunities, which I discuss in the section immediately below.

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