Senate extends stalemate as debt tensions simmer

Dems refuse latest deal; rally draws riot police

U.S. Park Police move past the front of the White House on Pennsylvania Avenue on Sunday, where war veterans and Tea Party groups were protesting the partial government shutdown now entering its third week.

WASHINGTON — With a possible default on government obligations just days away, Senate Democrats on Sunday refused to sign on to any deal that reopens the government but locks in more budget cuts for next year.

Their refusal extended the stalemate that has kept much of the government shuttered for two weeks and threatens to cause a federal default.

Elsewhere in Washington, war veterans and Tea Party groups protested the government shutdown by taking down barricades around the World War II memorial before marching to the gates of the White House.

Police officers, some in riot gear, pushed back against the crowd when it got too close to the White House fence, creating a brief flash point of anger in an otherwise peaceful demonstration.

The White House protest, which involved hundreds of people, quickly dissipated.

The rally started on the National Mall, which is home to U.S. war memorials and has been mainly closed to tourists since Oct. 1, when Congress failed to agree to continue funding the federal government, closing down services deemed “nonessential.”

The rally included speeches by Sarah Palin, a hero of the conservative Tea Party movement and former Republican governor of Alaska, and Sen. Ted Cruz (R., Texas), who has crusaded against President Obama’s health-care law.

Meanwhile, World Bank and International Monetary Fund leaders meeting over the weekend in Washington pleaded and warned that the United States must raise its debt ceiling and reopen its government or risk “massive disruption the world over,” as Christine Lagarde, the IMF’s managing director, put it.

The fiscal problems of the United States overshadowed the official agendas for the meetings, with representatives from dozens of countries publicly expressing worries about what was happening on Capitol Hill and in the White House.

The leaders came to Washington to talk about the international recovery, Ms. Lagarde said on NBC’s Meet the Press.

“Then they found out that the debt ceiling was the issue,” she said. “They found out that the government had shut down and that there was no remedy in sight.”

With only three days left before a potential default, Senate leaders failed Sunday to reach a deal on a plan to reopen the government and raise the debt limit.

The core of the dispute is about spending, and how long a stopgap measure that would reopen the government should last.

Democrats want across-the-board cuts known as sequestration to last only through mid-November; Republicans want them to last as long as possible.

Sen. Majority Leader Harry Reid (D., Nev.) and Sen. Mitch McConnell (R., Ky.) spoke only briefly by phone on Sunday. Democrats said the two leaders were inching forward and that a breakthrough was possible before the default deadline on Thursday.

“They had a good conversation. They are moving closer together, and I’m hopeful the Senate can save the day,” Sen. Charles Schumer (D., N.Y.) said Sunday.

Republicans accused Democrats of accepting nothing short of capitulation without offering anything in return.

“The Democrats keep moving the goal posts,” said Sen. Susan Collins (R., Maine) a lead Republican negotiator. “Decisions within the Democratic conference are constantly changing.”

Once the government is reopened and the threat of default is lifted, Democrats have agreed to formal budget negotiations, where, they acknowledge, Republicans may have the upper hand.

Both sides say they want a deal that reduces the deficit over the long term and shifts some budget cuts to programs that are essentially on autopilot such as farm subsidies and Medicare.

Republicans have one advantage: If no deal is reached during those talks, the next round of automatic cuts, even deeper than the first, go into force Jan. 1.