Despite Debt Disputes, Both Sides Press for Deal Today Before Asian Markets Open

Sunday, 24 Jul 2011 11:45 AM

 

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WASHINGTON — With the clock ticking ever louder, Obama administration officials and congressional Republicans clashed anew Sunday over extending the nation's debt limit, with the White House threatening a veto if the government's borrowing authority is not extended through the next elections.

Even so, with an eye toward nervous financial markets, Treasury Secretary Timothy Geithner said the two sides seem to be making progress in their long-running debt battle and predicted they will avert a historic federal default.

"It's unthinkable that this country will not meet its obligations on time. It's just unthinkable. We never do that. It's not going to happen," Geithner said.

House Speaker John Boehner, R-Ohio, flatly rejected President Barack Obama's insistence on a package that would extend the government's authority to borrow money beyond the November 2012 presidential and congressional elections. Democratic congressional leaders have also said the extension must last through next year.

"I know the president's worried about the next elections," Boehner said. "But my God, shouldn't we be worried about the country?"

The remarks came as congressional leaders and aides were beginning another day of meetings at the Capitol as they and the White House strain to craft a deal to avert a debt ceiling crisis by Aug. 2 — a week from Tuesday. That is the day the government runs out of cash to pay its bills — which administration officials and others say could cause catastrophic damage on not just the government's credit rating but the entire economy.

Congressional and Obama administration officials are hoping to announce a framework for an agreement by 4 p.m. Eastern time today. That is before the Asian financial markets open, and lawmakers want to avoid producing bad news that could push those markets down and worry American investors as well.

After a long day of meetings Saturday, lawmakers were looking at a plan that would boost the debt limit immediately by roughly $1 trillion — about enough to last through this year — while locking in slightly more spending cuts. Another package combining trillions more in savings and another extension of the debt limit would be considered later.

"There is going to be a two-stage process," Boehner said. "It's not physically possible to do all of this in one step."

Boehner said he hoped to announce a plan on Sunday, but added that the details were still being worked out. He said he could not predict whether it would be supported by congressional Democrats.

Administration officials said a short-term extension of borrowing authority would be harmful.

Asked if Obama would veto a plan that did not extend the government's borrowing authority into 2013, White House chief of staff William Daley said, "Yes. The president believes that we must get this uncertainty in order, to help the American economy and help the American people."

Geithner also said the administration opposes that proposal.

"We can't adopt an approach that leaves the threat of default hanging over the country for another six months," he said on ABC's "This Week." ''That would be deeply irresponsible to do, and we do not think that's an acceptable burden to put on the American economy."

On CNN's "State of the Union," Geithner used a different timeframe, saying it was crucial to "remove this threat of default from the country through the next 18 months."

"You want to take this out of politics, you don't want politics messing around with America's credit," he said.

Another Republican scoffed at the administration's opposition to a debt-ceiling plan that doesn't last into 2013.

"I think that's a ridiculous position because that's what he's going to get presented with," said Sen. Tom Coburn, R-Okla.

Geithner said two types of frameworks are under consideration: The comprehensive deal involving spending cuts and revenue increases discussed by Obama and Boehner for several weeks and the proposal by Senate Republican leader Mitch McConnell, R-Ky., that would make upfront cuts and establish a special congressional committee to seek a long-term plan for deficit reduction.

"Both of those are on the table. Now, they could be combined in various forms," Geithner said.

Geithner also expressed optimism based on the tenor of talks between the two sides.

"I think that forces of reason are getting stronger now," he said. He added, "If you listen carefully, you see people coming together on the kind of tough choices this country is going to need."

Boehner met Saturday with Obama to try again to find a balance of major spending cuts and revenue increases that could win passage in the GOP-controlled House and Democratic-controlled Senate. Also at the meeting were Senate Majority leader Harry Reid, Senate Republican leader Mitch McConnell, House Democratic leader Nancy Pelosi, Treasury Secretary Tim Geithner and White House budget director Jack Lew.

The four lawmakers met later in the Capitol, without Obama or his aides. Boehner is seeking as much as $4 trillion in cuts over a decade as a condition for raising the nation's debt limit. Reid accuses GOP leaders of intransigence, suggesting the two sides still have sharp differences.

Despite the looming deadline, White House and congressional officials said several proposals were still being discussed. A "grand bargain" would cut spending by up to $4 trillion over a decade and raise up to $1.2 trillion in new revenues. Other plans envision smaller revenue increases and spending cuts of $1.2 trillion or so.

All the proposals face a basic obstacle. Many House Republicans refuse to vote for higher tax revenues; most congressional Democrats consider higher revenues essential if government spending is to be cut so deeply.

Boehner appeared "Fox News Sunday," Geithner was on ABC's "This Week" and CNN's "State of the Union" and Daley and Coburn were on NBC's "Meet the Press."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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