Obama calls Republican concessions ‘positive,’ but not enough

Efforts by centre-right Republicans in the US Congress to avoid the first federal default in US history were welcomed on Saturday by President Barack Obama, though he said he remained unhappy with their proposals so far.

That meant a breakthrough remained elusive in the political stand-off over the government’s borrowing limit, which must be raised soon to prevent the US from defaulting on its debt. The dispute comes amid a partial government shutdown spawned by disagreements about annual spending and an Obama-introduced healthcare plan.

The latest proposals for ending the impasse have come from Republicans in the lower chamber, the House of Representatives. They are generally seen as the most conservative faction in Congress.

“It’s a positive development that House Republicans have agreed on the need to avoid the economic consequences of not meeting our country’s commitments,” Obama said in his weekly radio message.

Obama’s Treasury Department has set an October 17 deadline for Congress to raise the legal borrowing limit. Otherwise, the country risks running short of cash to meet all government obligations — including social welfare and other domestic programmes; defence; and interest payments on the 16.7-trillion-dollar federal debt.

Speaker of the House John Boehner and other House Republicans who met with Obama on Thursday have indicated they might go along with a temporary lifting of the debt ceiling — but only for six weeks and under certain conditions.

That proposal would mean a return of the stand—off just as the country enters its busiest holiday shopping period.

More moderate Republicans in the Senate have put forth a six—month proposal.

“It wouldn’t be wise, as some suggest, to just kick the debt ceiling can down the road for a couple months, and flirt with a first—ever intentional default right in the middle of the holiday shopping season,” Obama said.

The president warned that damage to the US credit rating would “cause global markets to go haywire” and also make it more expensive for everyone to borrow money.

“It would amount to a new tax — a Republican default tax — on every family and business in America,” Obama said.”So let’s pass a budget, put people back to work, and end this Republican shutdown.

Let’s pay our bills, and prevent an economic shutdown.” Non—essential government functions have been halted since October 1, with the Senate and House of Representatives unable to agree on even a temporary budget.

The House, where conservative opposition Republicans hold a majority, has passed budget measures that would erode Obama’s signature 2010 health insurance reforms. The legislation has stalled in the Democrat—controlled Senate.