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October 07, 2013

Congress enters crucial week in budget, debt limit battles

(Reuters) - As the government moved into the second week of a shutdown on Monday with no end in sight, a deadlocked U.S. Congress also confronted an October 17 deadline to increase the nation's borrowing power or risk default.

 

Republican House of Representatives Speaker John Boehner vowed not to raise the U.S. debt ceiling without a "serious conversation" about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default.

 

The last big confrontation over the debt ceiling, in August 2011, ended with an 11th-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if there was a default.

 

A similar last-minute resolution remains a distinct possibility this time.

Equities investors were unnerved by the apparent hardening of stances over the weekend. U.S. stocks opened sharply lower on Monday and European shares fell to a four-month low.

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