Obama and Republicans search for a deal on U.S. fiscal impasse

WASHINGTON, (Reuters) – President Barack Obama and congressional Republican leaders inched toward resolving their fiscal impasse yesteriday, but struggled to agree on the length and terms of a short-term deal to increase the U.S. debt limit and reopen the government.

Obama met Senate Republicans at the White House and spoke by phone to House of Representatives Speaker John Boehner as negotiations intensified on how to get hundreds of thousands of federal workers back on the job and extend the government’s borrowing authority past the Oct. 17 limit.

It was hard to gauge the progress of talks, as all sides refused to divulge many of the specific details of what is being discussed.

But both sides spoke with new optimism about the possibility of avoiding a fiscal crisis. Lawmakers were expected to work through the weekend with a goal of finishing a deal by early next week.

Economists have warned that a debt default would create global economic chaos, and analysts warned yesterday that if the shutdown lasts more than a month it would cause a sharp slowdown in fourth-quarter economic growth.

Obama wants the debt ceiling raised for longer than the six weeks first proposed by Republicans, and Republicans want a commitment to broader deficit-reduction talks from the White House.

“The two of them agreed that all sides need to keep talking,” White House spokesman Jay Carney told reporters after the call between Boehner and Obama. “It at least looks like there is a possibility of making some progress here.”

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