WASHINGTON — As the government shutdown ran through its second day on Wednesday with no end in sight, President Obama issued a stern warning that the nation was headed toward financial catastrophe if there’s no resolution to the crisis.
“This time, I think Wall Street should be concerned,” Obama said.
“When you have a situation in which a faction is willing to default on US obligations, then we are in trouble.”
“It is important for [Wall Street] to recognize that this is going to have a profound impact on our economy and their bottom lines, their employees and their shareholders,” he told CNBC in a White House interview.
The president indicated that Republicans have gotten under his skin with their refusal to send him a “clean” resolution to fund the government that doesn’t undo ObamaCare.
“I am exasperated with the idea that unless I say to 20 million people, ‘You can’t have health insurance,’ they will not reopen the government,” he fumed.
Obama hosted leaders of both parties in Congress at the White House late Wednesday.
But they emerged glumly with no sign of progress.
“He will not negotiate,” declared GOP House Speaker John Boehner.
“We had a nice conversation, a polite conversation.”
Democratic Senate Majority Leader Harry Reid (D-Nev.) wasn’t as diplomatic.
He accused Republicans of being a party “willing to take the country to the brink of disaster. The president said he will not stand for that.”
Republicans “did the same thing to Social Security, they did the same thing to Medicare and they’re trying to do the same thing to ObamaCare,” Reid complained.
Earlier in the day, Obama met with top Wall Street bankers, who later sided with him in urging Republicans to authorize an increase in the nation’s debt limit before the Oct. 17 deadline — a second issue that has been simmering.
“We shouldn’t use the threat of causing the US to fail on its obligations to repay its debt as a cudgel,” said Goldman Sachs chief Lloyd Blankfein.
A Tea Party congressman, John Fleming (R-La.), admitted that he’d be demanding concessions when it came time to negotiate the all-important debt-ceiling increase.
“I think there will be an even bigger list [of concessions] when it comes to the debt ceiling,” he said.
“We’re going to be talking about the Keystone XL pipeline, movement of cuts into entitlement reforms [and] beginning to adjust the sequester.”
Boehner is facing new pressure from more pragmatic rank-and-file Republican lawmakers who represent districts that have a strong Democratic presence.
About 10 of these lawmakers met in the office of Rep. Peter King (R-LI), a moderate who has been urging the GOP to accept Obama’s terms to reopen the government.
Eighteen Republicans have now spoken in favor of a “clean” government funding bill — technically enough to provide a majority if all Democrats vote for it.
“I know what it’s like to be making 30-something thousand a year and if you don’t get a paycheck you can’t pay your rent,” said Rep. Michael Grimm (R-SI), who came out for a clean bill and met with Boehner. “These are real people with real lives and real families.”
But a clean bill can come to the House floor only with Boehner’s OK, and for now he’s standing pat.
On Wednesday, the House took up a series of bills that would fund just small slices of the government, such as veterans’ services — and the White House immediately announced that Obama would veto them all.
A deep chill has developed between Boehner and Reid — the two congressional leaders who will be required to hammer out a solution.
A story leaked to Politico Tuesday revealed e-mail exchanges between Reid’s and Boehner’s chiefs of staff. The e-mails showed Boehner working hard behind the scenes to get an administrative ruling to preserve a health-care subsidy for lawmakers and their staffs — even though this week he endorsed a GOP plan to end the subsidies as a condition for opening the government. Reid’s chief of staff, David Krone, admitted the leak.
On Wednesday, Reid stuck it to Boehner again in a letter asking if he’d agree to end the shutdown in return for a meeting on other financial issues — an idea Republicans had previously rejected.