U.S. government shutdown continues as stalemate drags on

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WASHINGTON, 3Oct2013 (PNA/Xinhua)- A White House meeting between U.S. President Barack Obama and Congressional leaders on Wednesday afternoon ended with finger pointing but little sign of progress toward ending the government shutdown.

After more than an hour of talks, U.S. House Speaker John Boehner told reporters the president “reiterated one more time that he will not negotiate” and they are still divided.

Dismissing Boehner’s argument, Senate Democratic Leader Harry Reid said the Democrats has offered to engage in talks about the budget but the Republicans won’t budge.

House Minority Leader Nancy Pelosi added that the Republicans just “keep moving the goal posts” on what they want from a budget deal.

In a bid to break the impasse, Obama summoned the Republican and Democratic leaders in Congress to the White House for an afternoon meeting as the government shutdown stretched to the second day.

It was the first such meeting since many of the U.S. federal government agencies were forced to close doors from midnight Monday, which left hundreds of thousands of federal employees on unpaid furloughs.

The White House later said in a statement that “the president made clear to the leaders that he is not going to negotiate over the need for Congress to act to reopen the government or to raise the debt limit to pay the bills Congress has already incurred.”

Earlier on Wednesday, in a CNBC interview, Obama expressed his exasperation with the Republicans, saying they hold the functioning of government hostage to undercut the healthcare law.

Obama also said it is important for the Wall Street to recognize that this is going to have a profound impact on the economy and their bottom lines, their employees and their shareholders.

U.S. stocks slided on Wednesday as shutdown persisted. The Dow Jones Industrial Average lost 58.56 points, or 0.39 percent, to 15,133.14 points. The S&P 500 dipped 1.13 points, or 0.07 percent, to 1,693.87 points. The Nasdaq Composite Index edged down 2.96 points, or 0.08 percent, to 3,815.02 points.

After meeting with Obama at the White House on Wednesday, the Wall Street bank chiefs warned that the government shutdown, or worse, a failure to lift the government’s debt ceiling, could have an “extremely adverse” impact on the economic recovery.

“There is precedent for a government shutdown. There is no precedent for a default,” said Goldman Sachs CEO LIoyd Blankfein.

“There is a consensus that we shouldn’t do anything that hurts this recovery that’s a little bit shallow, not very well established and is quite vulnerable,” he added.

In a letter to House Speaker John Boehner Wednesday morning, Reid said if House Republicans passed a simple short-term measure to reopen the government, Democrats would agree to begin broad negotiations on spending and other fiscal issues such as health care and tax reform.

“There needs to be a path forward to reopen our government and protect our economy. This is a communication to you offering a sensible, reasonable compromise,” Reid said in the letter. But House Republicans quickly dismissed the offer.

The government shutdown also prompted Obama to cut short a trip to Asia, cancelling visits to Malaysia and the Philippines, the White House announced.

There is growing anxiety that the shutdown would merge with the looming debt limit fight. The Treasury Department has indicated that the debt ceiling will be reached by Oct. 17, urging the Congress to lift the cap by then. (PNA/Xinhua)

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