WASHINGTON — Congress toiled on Saturday to hammer out a deficit cutting compromise in the next 24 hours, hoping to assure markets before they open in Asia that the U.S. credit rating was safe from a disastrous default.
President Barack Obama, a Democrat, told congressional leaders during an emergency White House meeting on Saturday to find a way to lift the debt ceiling that would allow the country to pay its bills past next year's November election.
A Republican leadership aide said lawmakers were working on a plan for $3 trillion to $4 trillion in savings over 10 years, but another high-ranking Republican official said no numbers had been set.
Republican leaders want "to show progress" by 4 p.m. EDT on Sunday, before financial market trading gets underway in the Far East.
"Congressional leaders are working in good faith with the goal of having something to present to their members on Monday," a second Republican aide said.
It was not clear if this package contained any additional revenue alongside cuts in government spending, as Obama has demanded.
A Democratic aide said Republicans were pushing a package that raised the debt limit and cut spending in two steps, while Democrats want a single deal to cover borrowing through 2012.
Treasury Secretary Timothy Geithner and White House chief of staff Bill Daley were scheduled to speak on several Sunday TV news shows to hammer home Obama's argument that a deal must include more revenue from taxes.
Talks broke down on Friday after Republicans balked at a White House plan to raise revenues by $3.5-$4 trillion over 10 years, complaining it contained $400 billion more in additional tax revenue than they could stomach.
Obama, angry at the collapse of negotiations, chided Republicans and warned that time had run out to lift the $14.3 trillion U.S. borrowing limit, which faces an Aug. 2 deadline before the United States runs out of money to pay its bills.
He kept up the pressure on Saturday, urging Congress not to play "reckless political games" and warning against stop-gap measures that fail to tackle the deficit.
"A short-term extension could cause our country's credit rating to be downgraded," said White House press secretary Jay Carney in a statement after Obama's 50-minute meeting with congressional leaders.
Rating agencies say they will cut America's Triple-A credit rating if the United States fails to meet debt payments, likely triggering global market turmoil. Even if the United States does not default, its rating will be under pressure if Congress fails to tackle long-term deficit reduction.
Financial markets are growing more edgy and U.S. banks and businesses are making contingency plans for the possibility of a debt default that would drive up interest rates, sink the dollar and ripple through economies around the world.
Boehner, the top U.S. Republican, promised that Congress this weekend "will forge a responsible path forward", and that House and Senate leaders will work to find a bipartisan solution to "significantly reduce Washington spending and preserve the full faith and credit of the United States."
But Boehner must overcome stout resistance from tea party movement conservatives in his own party, who adamantly oppose any steps to raise tax revenue.
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