House and Senate lawmakers ended the weekend no closer to a deal on raising the debt limit by an Aug. 2 deadline, with the two parties instead preparing to move forward with competing plans. The biggest sticking point to an agreement appears to be the length of the debt limit increase, with Republicans seeking a bill that would raise the country’s borrowing limit for a few months, guaranteeing another debt ceiling fight in the middle of Obama’s bid for a second term.
Democrats want a plan that would last through the 2012 election cycle to spare both Obama and vulnerable Senate Democrats another debt ceiling fight.
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Democratic leaders met late Sunday with President Obama and “reiterated our opposition to a short-term debt limit increase,” according to a White House official.
House Speaker John Boehner, R-Ohio, could announce by Monday afternoon the framework for his short-term increase. Boehner wants a plan ready when he meets with his Republican Conference in the Capitol at 2 p.m., top GOP aides told The Washington Examiner.
Boehner talked via conference call with rank-and-file GOP members late Sunday, telling them he is working on a measure that embodies legislation they favor that would cut spending and create a balanced budget amendment. But since the Senate has rejected that specific bill, known as Cut, Cap and Balance, the GOP leader is trying to find “what can we pass through there that embodies” its principles, a source knowledgeable of the call told The Examiner.
Boehner told Republicans they have to stick together as a party and back a deal that includes both compromises and sacrifices.
“If we’re divided,” Boehner warned, “they win.”
He added that Republicans should do everything they can to avoid giving Obama a “clean” debt ceiling increase that includes no cuts or other spending reforms.
Majority Leader Eric Cantor, R-Va., who was also on the call, told members they are seeking “dollar-for-dollar cuts now as a down payment for future action” on spending reforms.
Boehner on Saturday had told lawmakers in his party he hoped to be able to announce a framework for a debt limit deal by Sunday afternoon, ahead of the start of trading in Asian markets.
But talks between Republican and Democratic leaders broke down that evening, with both sides taking partisan swipes at each other after leaving a meeting in frustration.
By Sunday evening, Asian markets appeared rattled by the impasse, showing a decline in S&P 500 futures that suggested U.S. markets could be in for a down trading day Monday.
On Sunday, the two parties didn’t even meet. Instead, Boehner worked on his own plan while Senate Majority Leader Harry Reid, D-Nev., began writing his long-term measure, which would raise the debt ceiling by $2.5 trillion and make an equal amount in cuts. Reid’s bill appears to exclude tax increases, which is intended to lure House Republicans. Reid’s plan would raise the debt ceiling high enough to last through the 2012 election cycle.
Boehner suggested on “Fox News Sunday” that it is still possible to resurrect a deal with Obama that included $3 trillion in cuts plus $800 billion in new revenue that would come through reforms in the tax code and economic growth. Boehner walked out on those talks when Obama asked for an additional $400 billion in tax increases.
The original deal that excludes the $400 billion “is still on the table,” Boehner said.
