President Obama held a meeting yesterday with a handful of Congressional leaders at the White House for the first time since the government shutdown began on October 1st and little progress was made towards resolving the budget impasse.
Speaker of the House John Boehner (R-Ohio) left the meeting saying that President Obama refused to negotiate with them to end the government shutdown.
After the federal government shutdown on October 1st nearly 1 million federal employees have been furloughed.
Some ripple effects from the shutdown are expected to be felt across different sectors of the U.S. economy, most notably with private companies that engage in business with the federal government such as defense contractors.
Most federal government agencies have cut services.
Federal parks and monuments that attract tourist dollars are now closed to the public.
The U.S. Department of Labor is not expected to be open to release their closely watched U.S. non-farm payroll employment report for September which was scheduled to be released on Friday.
Consequently, the markets will have to rely exclusively on U.S. labor data that was released yesterday from payroll processor ADP which showed that the U.S. economy added 166,000 jobs to the economy in September, slightly missing consensus estimates.
Yesterday President Obama sat down with CNBC’s John Harwood for an interview and responded to questions about the federal government shutdown and the debt ceiling deadline.
President Obama was asked about his upcoming White House negotiations on Wednesday with House Speaker Boehner.
President Obama admitted that fiscal negotiations will begin after he gets a clean piece of legislation from Congress.
“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…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” Obama said.
President Obama explained that it would set a bad precedent for a U.S. president if he gives concessions to an extremist wing of one party based on a threat of undermining the full faith and credit of the United States.
“If we get in the habit where a few folks, an extremist wing of one party, whether it’s Democrat or Republican, are allowed to extort concessions based on a threat of undermining the full faith and credit of the United States, then any president who comes after me, not just me, will find themselves unable to govern effectively” Obama said.
House Speaker Boehner (R-Ohio) has the authority and the majority vote in Congress right now to end the Tea Party shutdown if he allows for a vote in Congress that is expected to reveal a building coalition forming among a list of moderate Republicans and House Democrats.
However, the influential conservative wing of the Republican party has urged Speaker Boehner to hold out and not allow for a House vote on a clean piece of continuing resolution that will enact a short-term spending measure and end the government shutdown.
The conservative wing of the Republican party has convinced Speaker Boehner that holding out is the preferred option and giving in too soon to growing demands for a House vote will damage his credibility during later negotiations with the Obama administration and Democrats over raising the federal debt ceiling with its October 17th due date.