Washington, DC, United States (4E) – House Republican leaders offered President Barack Obama a 6-week window to raise the $16.7 trillion debt ceiling during talks at the White House on Thursday.
No deal was reached to end the 10-day federal government shutdown but the two sides agreed to continue negotiation.
The Republican proposal comes with a condition that White House negotiate a longer-term budget plan that would reopen the government. Senate Republicans also offered Obama a plan to reopen the government and raise the borrowing limit for six months.
Senate, Majority Leader Harry Reid (D-Nev.) also announced a legislation to raise the debt ceiling by $1 trillion and through the end of 2014. He said the bill will be put to a vote on Saturday.
Investors met the Republican proposals with optimism on Wednesday as the U.S. stock market reacted with its second-biggest gain of the year for equities. The Dow Jones industrial average closed at 15,126, up 323 points or 2.2 percent. The Standard & Poor’s 500 also rose 2.2 percent and the Nasdaq composite index rose 83 points.
The debt ceiling raise will prevent the U.S. government from defaulting in its debt, which is feared to hurt the economy and even bring back the U.S. into recession. The U.S. Treasury is expected to run out of cash by Oct. 17 if the debt ceiling is not raised.
Meanwhile, the effects of the government shutdown to troops were eased early on Thursday when the Senate passed a bill restoring funding of military death benefits and Obama signed it into law. The benefit was suspended due to the shutdown.
It was the second piecemeal legislation that tries to lessen the impact of the shutdown to government workers. The first, which was passed by Congress and signed into law by Obama before the start of the shutdown on Oct. 1, exempts military employees from furlough.