Tensions increase over US budget deal

Washington will be closely watching the financial markets to see if the uncompromising talk from Republican House speaker John Boehner rattles Wall Street and worldwide economies just 10 days before the threat of default would be imminent.

Treasury Secretary Jack Lew warned that the budget brinkmanship was “playing with fire” and implored Congress to pass legislation to re-open the government and increase the nation’s $16.7 trillion debt limit.

He repeated that Mr Obama will not link either bill to Republican demands for spending cuts and changes in the health care law.

A defiant Mr John Boehner insisted that Mr Obama must negotiate if he wants to end the shutdown and avert a default that could trigger a financial crisis and recession.

“The votes are not in the House to pass a clean debt limit, and the president is risking default by not having a conversation with us,” said Mr Boehner.

The shutdown has laid off hundreds of thousands of workers, closed national parks and museums and stopped an array of government services.

The one bright spot is that a significant proportion of the federal workforce has already been heading back to work.

Defence Secretary Chuck Hagel ordered nearly 350,000 back , basing his decision on a Pentagon interpretation of a law called the Pay Our Military Act.

Those who remain at home or are working without pay are a step closer to getting back pay once the partial government shutdown ends.

The Senate could act this week on the measure that passed the House unanimously on Saturday.

Democrats insist that Republicans could easily open the government if Mr Boehner allowed a vote on the emergency spending bill.