DEBT SHOWDOWN

Dems, GOP working hard on debt deal to avoid default

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Details of fallback plans unclear

(Photo: Associated Press)

Similarly, the precise elements of the rival fallback plans were sketchy.

Republican officials said Boehner envisioned an increase in the nation's debt limit of about $1 trillion and slightly more than that in federal spending cuts, with the promise of additional progress on both sides of the ledger if Congress can agree.

Democratic officials said Reid was at work on legislation to raise the debt limit by $2.4 trillion and reduce spending by slightly more.

Unlike the House GOP approach, his plan would guarantee a large enough increase in borrowing authority to ensure no recurrence of this month's crisis until after the 2012 elections. That is Obama's stated precondition for a compromise.

Yet any sum that large would require either cuts to benefit programs that aides said Reid preferred to leave untouched, or savings from the Pentagon, possibly by assuming the end of the wars in Iraq and Afghanistan.

The White House was largely consigned to a spectator's role on a weekend that began with Boehner's decision to call off talks with Obama.

Asked what the administration's plan was to avoid default, Treasury Secretary Timothy Geithner said, "Our plan is to get Congress to raise the debt ceiling on time."

The state of play veered between bipartisanship and brinkmanship on an issue of immense economic consequences.

Despite hours of compromise talks in the Capitol, lawmakers' aides had so far been unable to agree on a two-step plan that would satisfy Obama's demand for a large enough increase in the debt limit to tide the Treasury over until after the 2012 elections.

White House Chief of Staff Bill Daley said anything short of that would be a gimmick and prompt the world to say: "These people just can't get their act together."

Interviewed on Fox, Boehner said, "I would prefer to have a bipartisan approach to solve this problem. If that is not possible, I and my Republican colleagues in the House are prepared to move on our own."

White House and congressional leaders talked past each other on the Sunday TV shows as negotiations unfolded in secrecy.

"There will be a two-stage process. It's just not physically possible to do all of this in one step," Boehner said. "I know the president is worried about his next election. But, my God, shouldn't he be worried about the country?"

Geithner says default “unthinkable”

With an eye on the financial markets, Geithner insisted anew the United States would not default.

"It's just unthinkable," Geithner said. "We never do that. It's not going to happen."

The debt deal-making has consumed Washington for weeks and has put on display a government that at times risks utter dysfunction.

Even after talks about between Obama and Boehner broke down in spectacular fashion Friday, Geithner said the two men were still negotiating.

He also suggested the ambitious framework the two leaders had discussed, targeting a deficit reduction of $4 trillion, remained under consideration.

"I don't know. It may be pretty hard to put Humpty Dumpty back together again," Boehner said of that grand plan. "But my last offer is still out there. I have never taken my last offer off of the table and they never agreed to my last offer."

Under any scenario, Washington's leaders have run themselves almost out of time.

Daley said, in fact, the consequences are already taking hold. "I don't think there's any question there's been enormous damage done to our creditworthiness around the world," Daley said.

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

 

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