Clock is ticking: Day 14 of US shutdown, still no deal in sight

The United States is still facing a potentially devastating sovereign debt default. Just three days remain for Democrats and Republicans to strike agreement over raising the US debt and restoring government operations, but there was little sign of progress so far.

Republicans and Democrats - at war over the country's finances and ideological direction for more than two weeks - tried to shed a positive light Sunday on a weekend of talks that despite the threat of global economic censure did not produce a solution.

The Senate convened a rare Sunday session to try and break the budgetary impasse that prompted the government to shut down on October 1, a move that has since damaged domestic confidence and undermined America's reputation as the world's leading economic superpower.

If the US debt ceiling is not raised by October 17, the Treasury would run out of money and could begin defaulting on its obligations for the first time in history, with likely dire consequences for the global economy.

Seeking to avert that outcome, the Democratic leader in the Senate, Harry Reid, talked up the dialogue with Republicans - represented by top Senator Mitch McConnell - though nothing concrete was disclosed.

"Our discussions were substantial, I'm optimistic about a positive conclusion of the issues before this country this day," Reid told the Senate.

The Senate will meet again Monday at 2 pm ET.

But McConnell said in a statement that he backed a bipartisan Senate plan already rejected by Reid. That plan would raise the debt ceiling until January 31 and fund the government through to the end of March 2014, in exchange for minor changes to the federal health care law.

US Treasury Secretary Jacob Lew has told the International Monetary Fund's policy steering committee that Washington understood its reputation as a safe harbor was at risk.

Stock markets are already factoring in a possible default if no deal is reached between President Barack Obama, his Democratic Party and rival Republicans by Thursday night.

Tension rose in the capital after military veterans and activists tore down barricades at the World War II memorial and carried them to the White House to protest the shutdown of national monuments and parks.

Hardline Republican lawmakers like Senator Ted Cruz and former Alaska governor Sarah Palin spoke at the protest, charging that Obama had ordered the shutdown of popular sites to increase the pain.

Mounted police patrolled near the White House, and large groups of people and protestors roamed in the area. One group held an "impeach Obama" sign in front of the White House fence.

Global pressure for a deal in Washington is mounting.

Over the weekend, world financial leaders meeting in Washington for the semi-annual International Monetary Fund-World Bank gathering said finding a solution was "urgent."

"The standing of the US economy would, again, be at risk," International Monetary Fund chief Christine Lagarde said on NBC's "Meet the Press," comparing the effects of failing to raise the debt ceiling and reopening the government to the 2008 global financial meltdown.

Less than one-third of the US debt - about 5.6 trillion dollars - is held by foreign governments or foreign investors, with China and Japan each holding more than 1 trillion dollars, according to the US Treasury.

Without Congressional approval to lift the ceiling - a move that until 2011 was done with little discussion - the US will be unable to pay interest on its debt held by foreign investors, to say nothing of payments to senior citizens and other recipients in line for mandatory government support.

Power in Washington is currently divided between the two parties. The most conservative faction in US Congress, Republicans, holds the majority in the House of Representatives, fired on by the small Tea Party group.

Democrats have the majority in the Senate, but not the 60 votes they need to end debate on a bill so it can be brought to a simple majority vote. That means Senate Republicans can block bills - as they did Saturday when they blocked the Democratic proposal to raise the US debt ceiling through 2014 - but they can't pass bills.

In the end, however, Democrats hold the final say on whether a law can pass, because Obama must sign the legislation.

WWII veterans rally in Washington DC against shutdown

Hundreds of veterans frustrated with the government shutdown converged on the White House on Sunday, protesting the closure of Washington’s monuments and memorials. The veterans, who started marching from the World War II Memorial at about 8 am this morning, also said they were upset that they have seen their disability benefits stop because of the government stalemate over the budget.

Protesters took barricades that were blocking the entrance to D.C.’s monuments and piled them in front of the White House, chanting: "Respect our vets."

"This is the people's memorial," Texas Sen. Ted Cruz told a crowd of several hundred gathered near the WWII Memorial on the closed National Mall, which has become a national symbol of the shutdown and the country’s response. "Simple question: Why is the federal government spending money to keep veterans out of the memorial? Why did they spend money to keep people out of Mount Vernon, Mount Rushmore? Our veterans should be above political games."

Veterans, including many in wheelchairs, took down police barricades and entered the memorial at about midday as others took the protest to the edge of the White House South Lawn.

"Today somebody’s wife [or] husband is dead in Afghanistan. Is somebody going to pay her husband [or] his wife or their children?" one protester shouted at the White House, referring to the partial shutdown cutting off benefits for the survivors of military personnel.

Some of the metal barricades were carried the roughly half-mile walk from the memorial to the White House, where they were left near the fence in front of Pennsylvania Avenue.

A man was arrested at the event in connection with bringing at least one gun in a bag.

Protesters shouting "U.S.A." and "Tear down these walls" are putting the blame squarely on President Obama and Democratic congressional leaders.

Voice of Russia, Foxnews, The Washington Post, dpa, AFP, The Guardian