“Just as top Senate Democrats began to lay the groundwork to raise the U.S. government’s borrowing limit through 2014, senior White House officials refused to rule out a short-term increase. The divergent messages caused major heartburn for top Senate Democrats and gave Republicans fresh hope that they could defeat a yearlong debt ceiling hike and win concessions from President Obama in this fall’s fiscal battles,” Politico reports.

“By late Monday afternoon, nervous Senate Democrats had reached out to the White House to ensure they were on the same page — and the concerns on Capitol Hill seemed to be alleviated after senior administration officials downplayed the idea of a short-term increase.”

The Hill: Who will blink first, Obama or Boehner?

“Wall Street is showing few signs so far that it is fearing the financial panic it has been predicting should the government default on its debt,” the New York Times reports.

“Many strategists are closely watching how much investors are willing to pay for Treasury bills that are set to come due in the days immediately after Oct. 17. Normally as the due date for a bill draws closer, it becomes more expensive, trading at less of a discount to its par value. Now, though, the bills set to pay out in the near term are getting much cheaper as investors question whether the government will be able to pay them off.”

National Review: “House Republican leaders met today at the Capitol, but they made little progress toward solving the fiscal crisis, or calming the GOP’s growing tensions. They remain undecided on the contours of a potential deal, and on how to sell one, especially to the conference’s bloc of skeptical conservatives.”

Said one GOP aide: “It’s the House of indecision. We don’t have the votes for a big deal, small deal, or short-term deal.”

The Senate is preparing to move ahead this week on legislation to raise the nation’s debt ceiling, Senate aides told ABC News, with Majority Leader Harry Reid expected to file a bill shortly on a “clean” debt-limit increase.
 
“With only 10 days until the debt-ceiling deadline Oct. 17, Senate Democrats are attempting to jump-start a debate on increasing the nation’s borrowing power of $16.7 trillion. Strong resistance is expected from some Republicans, aides say, so Reid wants to give the Senate enough time to overcome the threat of a filibuster. If Republicans exhaust all procedural options, the earliest the Senate could approve the bill is Oct. 15.”

A new Deseret News/KSL poll in Utah finds that 56% of voters disagreed it was worth shutting down the government as part of the effort by Sen. Mike Lee (R-UT) and other members of the tea party caucus, and just 37% agreed.

The poll also found Lee with a 43% to 35% approval rating.

Said pollster Dan Jones: “There is no question that Mike Lee got some name identification from what he’s doing.He needs to watch his negatives because he could be vulnerable if he seeks re-election.”

A new ABC News/Washington Post poll finds 70% of Americans disapprove of how the Republicans in Congress are handling the budget negotiations, up 7 points from a week ago. Far fewer, 51%, disapprove of President Obama’s approach, essentially unchanged in the past week.

“In another way to look at the results, Obama’s gone from 41% to 50% approve-disapprove last week to 45% to 51% now – a 9-point negative margin then, a similar 6-point negative margin today… But the Republicans have gone from 26% to 63% approve-disapprove to 24% to 70%, an initial 37-point difference widening now to a 46-point negative result.”

A new Pew Research survey finds that by 38% to 30% margin more say that Republicans are to blame for the government
shutdown than President Obama while 19% volunteer that both sides
are equally to blame.

Rep. Lee Terry (R-NE) who initially said he would not donate his salary during the government shutdown apologized over the weekend, the Omaha World Herald reports.

Said Terry: “The other day I made a statement that I would put my needs above others in crisis. I’m ashamed of my comments. It was not leadership. It is not how I was raised. It is not the nature of my character. It is not what I want to teach my sons. I apologize for my hurtful remarks when so many others are feeling the pain of Washington’s dysfunction.”

The brutal front page headline: “Terry sorry for putting his needs above others”

“I think this is damaging for the Republican Party and it’s not just me
who does, countless mainstream conservatives — not moderates. Republicans
have told me the same thing and they’re talking to me about trying to
figure out ways out of this.”

— Sen. Chuck Schumer (D-NY), quoted by Politicker, on the government shutdown.

Prior to 1995, the “Gephardt Rule” prevented stalemates over raising the nation’s debt limit because whenever the House passed a budget resolution, the debt ceiling was deemed raised at the same time.

However, Josh Green notes Speaker Newt Gingrich, “fresh from the Republican triumph of the 1994 midterms, recognized the same thing that Tea Party Republicans recognize today: The threat of default could be used to extort Democratic concessions. Gingrich abolished the Gephardt Rule, and within the year the government had shut down.”

“The way out of the crisis for Boehner and Obama is to agree on a deal that allows a modest, face-saving concession to Boehner — medical-device tax repeal? — in exchange for reimposing the Gephardt Rule. True, Obama says he won’t negotiate over the debt ceiling. But his rationale is that doing so would fatally weaken future presidents, who’d be shaken down every time a debt-ceiling vote approached. If such votes were eliminated, Obama would have nothing to fear–and this damaging showdown could finally come to a close.”

Sen. Tom Coburn (R-OK) told CBS News there was “no such thing” as the debt ceiling and that if it is not raised the United States will not default on its debt.

Said Coburn: “There’s no such thing as a debt ceiling in this country because it’s never been not increased, and that’s why we’re $17 trillion in debt. And I would dispel the rumor that’s going around that you hear on every newscast that if we don’t raise the debt ceiling, we’ll default on our debt — we won’t. We’ll continue to pay our interest, we’ll continue to redeem bonds, and we’ll issue new bonds to replace those.”

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