No progress in resolving impasse on US shutdown

WASHINGTON - A large chunk of the 800,000 furloughed federal employees will soon be returning to work, but a resolution to the budget impasse that led to a partial government shutdown remained elusive Sunday with both sides sticking to their positions.

Defense Secretary Chuck Hagel ordered nearly all 350,000 furloughed Defense Department civilian employees back on the job. Hagel said he based his decision on a Pentagon interpretation of a law called the Pay Our Military Act, which was passed shortly before the partial government shutdown began.

Republican lawmakers had complained in recent days that the Obama administration was slow to bring back those workers even though the law allowed it.

House Speaker John Boehner said that he did not see a way out of the government shutdown unless President Barack Obama is willing to engage in negotiations with Republicans.

But Treasury Secretary Jacob Lew rejected that approach, saying Congress needs to quickly pass legislation re-opening the government and also a measure boosting the nation's $16.7 trillion debt limit. Lew said Obama has not changed his opposition to tying these measures to Republican demands on health care and spending cuts.

"What we've seen is ... `Unless I get my way, you know, that we'll bring these terrible consequences of shutdown or default,' " Lew said Sunday on CBS. "Those kinds of threats have to stop."

Boehner and Lew in separate television interviews gave no hint of any compromise to end the budget impasse that has shut down part of the government since Tuesday and is running the risk of a first-ever default on the government's debt unless the current debt ceiling is raised by an Oct. 17 deadline.

Asked how the standoff might end, Boehner said Sunday on ABC that he was uncertain: "If I knew, I'd tell you."

The top Republican in the House of Representatives added that Obama can call him any time to start negotiations to end the shutdown. "He knows what my phone number is," Boehner said.

Lew said Sunday that Congress should act immediately to reopen the government because the votes are there to pass a temporary budget measure.

"There are no winners here," Lew said on NBC. "Every day the government is shut down does real harm to the American people."

Lew said that members of Congress "need to open the government up. They can do it today."

But Republicans blamed Obama for the impasse.

Republican Sen. John Cornyn said the shutdown cannot end without Obama sitting down with congressional Republicans.

"We're not going to resolve this without the president engaging," Cornyn said on CBS.

The federal government was partially shut down Tuesday, the first day of the new budget year, after Republicans and Democrats couldn't agree on a plan to continue funding federal agencies.

House Republicans are demanding significant changes to Obama's signature health care law in exchange for reopening the government, a demand that Democrats say is absurd.

Since Tuesday, the Republican-led House of Representatives has passed several bills to reopen selected parts of the government. Democratic leaders are rejecting the piecemeal approach, saying the entire government should be reopened and the 800,000 federal workers on furlough put back to work.

In a rare Saturday session -- and an even rarer showing of bipartisanship -- the House voted 407-0 to pass a bill to provide furloughed workers with back pay. The Obama administration supports the retroactive pay bill and Senate Majority Leader Harry Reid said he expects the Democratic-led Senate to pass it.

The vote was widely expected. Congress made the same deal after the mid-1990s shutdowns.

The back-pay bill and Hagel's decision Saturday, based on a bill supported by Republicans and Democrats and signed into law by Obama, would appear to take a big bite out of the impact of the political impasse that has left the government without a budget.

In a written statement explaining his action to recall furloughed workers, Hagel said the Justice Department advised that the Pay Our Military Act does not permit a blanket recall of all Pentagon civilians. But government attorneys concluded that the law does allow the Pentagon to eliminate furloughs for "employees whose responsibilities contribute to the morale, well-being, capabilities and readiness of service members."

Hagel said he has told Pentagon officials, including leaders of the military services, to "identify all employees whose activities fall under these categories." He said civilian workers should stand by for further word this weekend.

In remarks to reporters, Robert Hale, the Pentagon's budget chief, said he did not yet know the exact number of civilians who would be brought back to work but that it would be "90 percent plus." He said there are about 350,000 civilians on furlough, somewhat fewer than the 400,000 that officials had previously indicated. If 90 percent were recalled that would mean 315,000 coming off furlough.

Hale said he hoped that a "substantial number" could be returned to work on Monday but that an exact timetable was not available.

The politics of the shutdown have merged with partisan wrangling over the graver issue of raising the federal debt limit by Oct. 17. If that doesn't happen, the White House says, the government will be unable to pay all its bills, including interest on debt. Economists say a U.S. default would stun world markets and likely send trigger a global recession.

Boehner and Obama say they abhor the idea of a default. But they and their respective parties have not budged from positions that bar a solution.

Boehner is facing pressure from the hardcore conservative tea party wing of his party to hold firm on getting concessions from the Obama administration before raising the debt ceiling.

Sen. Ted Cruz, a Texas Republican and tea party favorite, said the threat of a first-ever default is the best leverage that Congress has to rein in the White House. Cruz told CNN on Sunday that any agreement to allow the government to borrow more money to pay its bills must include a "significant" plan to reduce future spending, no new taxes and "mitigating the harms from Obamacare."

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Associated Press writers Robert Burns and Julie Pace contributed to this report.

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