POLITICS

Last-minute debt compromise 'very near' - or not

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Halfway around the world, on a visit to Camp Leatherneck in Afghanistan, the nation's top military officer fielded questions from troops asking if they would be paid in the event of a default.

Harry Reid and John Boehner in a meeting earlier this week. (Photo: Associated Press)

"I actually don't know the answer to that question," said Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, although he told them they would continue to go to work each day.

Without legislation in place by next Tuesday, administration officials say the Treasury will run out of funds to pay all the nation's bills. They say a subsequent default could prove catastrophic for the U.S. economy and send shockwaves around the world.

The president is seeking legislation to raise the government's $14.3 trillion debt limit by about $2.4 trillion, enough to tide the Treasury over until after the 2012 elections. Over many weeks, he has agreed to Republican demands that deficits be cut - without a requirement for tax increases - in exchange for additional U.S. borrowing authority.

But Obama has threatened to veto any legislation that would require a second vote in Congress for any additional borrowing authority to take effect, saying that would invite a recurrence of the current crisis in the heat of next year's election campaigns.

Saturday's developments opened with Obama saying, "There is very little time" in his weekly radio and Internet address.

A few hours later, House Republican leaders engineered a vote to defeat a Reid-drafted proposal to raise the debt limit on a near-party line vote at mid-afternoon.

Arguing into the night, Republicans stood ready to block the same measure's advance in the Senate.

Reid accused Republicans of filibustering, and it appeared he was hoping to find enough defectors in the GOP ranks so he could overcome the blockade.

In contrast to McConnell, Reid said individual Republicans had shown a willingness to compromise.

Indeed, some Republicans expressed concerns about the effects of gridlock.

"I'm worried about Congress defaulting on our country," said Sen. Johnny Isakson, R-Ga. He suggested terms of a possible compromise and urged fellow lawmakers to find common ground.

With financial markets closed for the weekend, lawmakers had a little breathing room, but not much. Asian markets begin opening for the new work week when it is late Sunday afternoon in the capital.

In his remarks at a news conference, McConnell said Obama "needs to indicate what he will sign, and we are in those discussions."

He said later he had spoken several times during the day with Vice President Joe Biden, who played a prominent role in earlier attempts to break the gridlock that has pushed the country to the verge of an unprecedented default.

Boehner said that despite the partisanship of recent weeks, "I think we're dealing with reasonable, responsible people who want this crisis to end as quickly as possible and I'm confident it will."

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