WASHINGTON — A nervous China warned Washington Monday to stop messing around.
As stocks slumped on Wall Street and around the world, China called for quick action by Washington to avoid what would be a calamitous default on U.S. government debt.
It was China’s first public comment on the looming Oct. 17 deadline for President Obama and Congress to increase the nation’s borrowing capacity.
Failure to raise the debt ceiling would leave the U.S. government unable to pay its bills, a problem of grave concern to the world’s economy and especially to China, which holds nearly $1.3 trillion in U.S. Treasury bonds.
“We naturally are paying attention to financial deadlock in the U.S. and reasonably demand that the U.S. guarantee the safety of Chinese investment there,” said Chinese Vice Finance Minister Zhu Guangyao. “On the question of the debt ceiling, the Chinese side feels the U.S. needs to take realistic and resolute steps to ensure against default on the national debt,” he added.
The debt ceiling is not the only issue creating paralysis in Washington. Republicans and Democrats also are deadlocked on new spending to end the government shutdown that began one week ago and threw 800,000 federal employees off the job.
But the rhetoric Monday was unchanged — and generally uncompromising — while new polls suggested Republicans are paying a heavier price than Democrats for the deadlock.
The Dow Jones industrial average fell about 1% to its lowest level in a month as economists warned a failure by Congress to raise the federal borrowing limit could cause economic shockwaves. Leading indexes ended down 1.2% in Japan, 0.7% in Hong Kong, 0.4% in Germany and 0.3% in Britain.
Obama reiterated his demand that Speaker John Boehner (R-Ohio) allow the House to vote on bills that would end the shutdown and raise the debt ceiling without conditions.
The President challenged Boehner’s claim over the weekend that there were not enough votes in the Republican-controlled House to pass a new spending bill without any strings attached.
In a surprise appearance at the Federal Emergency Management Agency, Obama said, “Pass a budget, end the government shutdown, pay our bills, and prevent an economic shutdown.”
“If Republicans and Speaker Boehner are saying there are not enough votes, then they should prove it,” Obama said. “Let the bill go to the floor and let’s see what happens. Just vote.”
The House has allowed votes on legislation to fund the entire government only if those measures contain provisions delaying or defunding the President’s health care act.
Obama noted that 86% of FEMA workers have been furloughed, including about 200 who briefly returned to work, unpaid, to track a tropical storm in the Gulf. “That’s no way of doing business,” he said.
But Boehner held firm. He called on Obama to agree to negotiations on changes in the nation’s health care overhaul and steps to curb deficits — in exchange for ending the threat of default and ending the government shutdown. “Really, Mr. President. It’s time to have that conversation before our economy is put further at risk,” the Ohio Republican said in remarks on the House floor.
Obama said he would talk with the Republicans on those topics or virtually any others.
But the White House has said repeatedly the President will not negotiate until the government is fully reopened and the debt limit has been raised.
Democrats said Senate Majority Leader Harry Reid (D-Nev.) was drafting a bill to raise the debt ceiling so the government will meet its projected borrowing needs through the 2014 elections.
Several polls released Monday showed the public blames Republicans more than the Democrats for the gridlock, even as confidence in Congress as a whole is hovering at a record low of 10%.
A Washington Post-ABC News poll found 70% of Americans disprove of how congressional Republicans have handled the budget debate, while 61% disapprove of Capitol Hill Democrats’ performance. About 51% disapprove of Obama’s handling of the issue.
And a Pew poll found that 38% blame Republicans for the stalemate, versus 30% faulting Obama and 19% blaming both.
The numbers are not as bad for Republicans as in the 1995 government shutdown, when then-President Bill Clinton battled House Republicans led by Newt Gingrich. Far more voters blamed Republicans for that prolonged fight.
Still, the findings could harden the position of Democrats, who say Republicans’ hardline will hurt the GOP in the 2014 midterm elections.
