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Senators hold talks on US budget


President Barack Obama met with small business owners about the government shutdown (AP)

President Barack Obama met with small business owners about the government shutdown (AP)

President Barack Obama met with small business owners about the government shutdown (AP)

The focus of efforts to end the government shutdown and prevent a US default has shifted to the Senate, where leaders were in talks aimed at resolving the twin stalemates.

Word of the negotiations between Senate Majority Leader Harry Reid and the top Republican, Mitch McConnell, emerged as the Senate, as expected, rejected a Democratic effort to raise the government's borrowing limit through next year.

"This bill would have taken the threat of default off the table and given our nation's businesses and the economy the certainty we need," the White House said in a statement.

Republicans objected because they want the extension to be accompanied by spending cuts.

The spotlight turned to the Senate as the partial shutdown reached its 12th day. It also came with the calendar edging closer to October 17, when administration officials have said the government will deplete its ability to borrow money, risking a first-time federal default that could jolt the world economy.

There are two issues at play - the US government has been partially shut since October 1, idling about 350,000 federal workers, because of Congress' failure to pass a normally routine temporary spending bill. Separately, Mr Obama wants Congress to extend the government's borrowing authority - another matter that usually had been routine..

House Speaker John Boehner told fellow Republicans earlier that his talks with Mr Obama had stalled.

"The Senate needs to hold tough," Republican Greg Walden said Mr Boehner told his party's House lawmakers. "The president now isn't negotiating with us."

Republican senators said the talks between Mr Reid and Mr McConnell had started yesterday and that was confirmed by Senate Democratic aides.

The Senate vote derailing the Democrats' debt-limit measure was a near party-line 53-45 in favour of the bill. That fell seven short of the 60 votes required to overcome Republican objections to considering the measure under Senate procedural rules.

"The only thing that's happening right now is Sen. Reid and Sen. McConnell are talking. And I view that as progress," said the second-ranking Republican senator, John Cornyn of Texas.

House conservatives said Mr Obama was to blame for the talks with their chamber running aground.

"Perhaps he sees this as the best opportunity for him to win the House in 2014," said Republican John Fleming. "It's very clear to us he does not now, and never had, any intentions of negotiating."

Mr Obama has said repeatedly in recent weeks that he is willing to negotiate with Republicans on budget, health care or other issues, but only after the government is reopened and, separately, the debt limit is raised.

He has insisted that he will not make concessions to Republicans who are trying to use the government shutdown and debt ceiling as leverage, saying that would only encourage the opposition party to use the same tactics in the future.

"It doesn't have to be this way. It's not supposed to be this way," Mr Obama said in his weekly radio and internet address. "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."