Updated May 28 at 9:28pm

Republicans pitch short debt-cap increase with shutdown in place

House Republican leaders proposed a short-term increase in the debt ceiling that would continue the government shutdown and reduce the prospects for a U.S. default while extending the partisan fiscal fight. More

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Republicans pitch short debt-cap increase with shutdown in place

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WASHINGTON - House Republican leaders proposed a short-term increase in the debt ceiling that would continue the government shutdown and reduce the prospects for a U.S. default while extending the partisan fiscal fight.

House Speaker John Boehner’s plan would increase the debt ceiling through Nov. 22, said Michael Steel, his spokesman. Republicans want to engage President Barack Obama in negotiations over ending the shutdown, which began Oct. 1 after Republicans insisted on changes to the 2010 health-care law.

“It’s time for leadership,” Boehner, an Ohio Republican, told reporters in the Capitol today. “It’s time for these negotiations and this conversation to begin.”

The plan, which House Republicans will discuss with Obama at the White House at 4:35 p.m. today, marks the first sign that the parties may be able to resolve the impasse without the catastrophic economic consequences that the Treasury Department said would stem from a default.

Obama has insisted that he will negotiate on broader fiscal and health-care issues only after a debt-limit increase is passed and the shutdown ends.

The Standard & Poor’s 500 Index rose 1.4 percent at 11:31 a.m. in New York on optimism among some traders that a deal is closer. Rates on Treasury bills due Oct. 17 dropped for the first time in six days, declining 20 basis points to 0.28 percent at 11:06 a.m. New York time, according to Bloomberg Bond Trader prices.

The benchmark 10-year yield rose four basis points, or 0.04 percentage point, to 2.70 percent, after touching 2.72 percent, the highest level since Sept. 23.

‘Olive branch’

Representative Dennis Ross, a Florida Republican, called the plan an “olive branch” designed to elicit a counteroffer from Obama.

“We’re not going to default,” he said. “Now help us reopen the government and give us something to consider in that regard,” Ross said. “Hopefully he will.”

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