By Richard Cowan and Mark Felsenthal
WASHINGTON (Reuters) - There were signs of stepped up efforts on Monday to find an exit strategy from the current U.S. fiscal crisis both in Congress and at the White House, with President Barack Obama saying he would accept a short-term increase in the nation's borrowing authority in order to avoid a crisis.
Separately, a Senate aide said Republican Senator Rob Portman, an Ohioan influential on budget issues, was floating a plan to cut federal spending and reform the U.S. tax code as part of a broader deal to reopen shuttered government agencies and raise the government's debt ceiling in order to avoid default.
But seven days into a government shutdown and only 10 days from a critical need to raise the nation's debt limit, nothing amounting to a breakthrough was in sight.
Obama's press secretary, Jay Carney, told reporters the president would be willing to accept a short-term debt ceiling increase in order to get past the potential crisis date of October 17 when the government hits the $16.7 trillion borrowing limit.
And, in what could be construed as a shift in tone, Obama said he is open to negotiations over his healthcare plan and budget issues, but only after Congress approves measures to end a week-long government shutdown and raise the U.S. debt ceiling.
"As soon as that happens I am eager and ready to negotiate with Republicans on a whole range of issues: how do we create more jobs, how do we build the economy, how do we boost manufacturing," said Obama, in a visit to the Federal Emergency Management Agency on Monday to spotlight the loss of government services because of the shutdown.
"I'm happy to talk about healthcare. I'm happy to talk about energy policy, how do we deal with our long-term fiscal situation," he said.
Obama has been particularly resistant to any tampering with his healthcare law, which has experienced a series of problems in the initial rollout. Any negotiations over it would be aimed at tinkering with it to improve it, not gut funding for it as Republicans want, White House aides have said.
Conservative Republicans in the House of Representatives have resisted funding the government for the current fiscal year until they extract concessions from Obama that would delay or defund his signature healthcare law.
Many conservative Republicans want a similar condition placed on raising the debt ceiling, as well as measures aimed at cutting deficits.
A Senate Republican aide, who asked not to be identified, said that Portman's proposals were in an early stage with no guarantees that they would gain traction in a Congress deadlocked over budget and debt challenges.
Nevertheless, as House Speaker John Boehner, a Republican, and Senate Majority Leader Harry Reid, a Democrat, continued to trade barbs through their spokesmen, Portman's proposal contained elements that could be acceptable to both sides.
Under the proposal, Obama would win a full year of government funding, instead of a short-term spending bill lasting several weeks that would have to be renegotiated in November or December, the aide said.
Republicans would get the strict across-the-board spending cuts that currently are in place, which many liberal Democrats, and some more centrist Republicans, want to scrap.
In addition, the fiscal package would contain $600 billion in savings that already have been proposed by President Barack Obama in his budget submissions to Congress.
The aide said the savings would come mainly from "mandatory" programs. Those generally refer to Social Security, Medicare and Medicaid, the benefit programs for retirees and for the elderly and poor to receive health care.
The remaining piece of the puzzle would be instructions to tax-writing committees in Congress to write legislation by next year to reform the tax code in a way that would help further grow the U.S. economy.
The aide said that Portman has floated the idea to other Republican senators, including Senate Republican leader Mitch McConnell, as well as some Democrats.
Boehner vowed on Sunday 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.
Financial markets showed signs of growing anxiety on Monday over the dispute. The dollar and global equity markets fell on Monday with the Standard & Poor's 500 Index <.SPX> closed down 0.9 percent and the Nasdaq Composite Index <.IXIC> fell 1 percent.
The Pentagon said over the weekend that it would recall around 350,000 of its furloughed civilian workers. The rest of the 800,000 or so federal employees idled by the shutdown faced another week off the job.
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.
(Additional reporting Steve Holland, Roberta Rampton, Thomas Ferraro; Editing by Fred Barbash and Tim Dobbyn)
