With markets waking, House and Senate leaders worked through the weekend, trying to overcome the distrust between them and to find a path around default, just eight days away now and counting.
Going into Sunday night, no final agreement had been reached, but House Speaker John Boehner was still pursuing a two-stage, $3 trillion-plus package that would raise the debt ceiling in increments, by $900 billion first and then by about $1.6 trillion next year.
Continue Reading Since breaking off talks with the White House, the Ohio Republican has kept open lines to President Barack Obama, and the two men talked Sunday. But at this stage, more may depend on Boehner's working relationship with his would-be partner, Senate Majority Leader Harry Reid (D-Nev.)
In his second conference call in as many days on Sunday, Boehner gave a nod to Reid by emphasizing that any legislative strategy has to pass the Senate as well. "We've seen this coming all year long. But here's the challenge: To stop [Obama], we need a vehicle that can pass in both houses," Boehner told rank-and-file Republicans.
"I do think there is a path," Boehner went on. "But it's gonna require us to stand together as a team. It's gonna require some of you to make some sacrifices. If we stand together as a team, our leverage is maximized and they have to deal with us. If we're divided, our leverage gets minimized."
Reid and House Minority Leader Nancy Pelosi (D-Calif.) met with Obama on Sunday evening at the White House. The Nevada Democrat must walk a fine line between working with Boehner and keeping faith with the president and Pelosi in the mounting crisis.
Boehner had his second conference call with members of his own party in as many days late Sunday afternoon to describe the alternatives. Conservative critics are stepping up the pressure to have each debt-limit increase matched by locked-in savings. But the process is already so tilted against Democrats, it risks blowing up in the Republicans' face — with huge unknown consequences for both parties and the nation.
Two issues stand out: the relevant size of the two debt ceiling increases and determining a fair reckoning for the savings from winding down the wars in Iraq and Afghanistan that have certainly contributed to the debt crisis now before lawmakers.
For the White House, going into the 2012 elections, an even greater concern is to establish some certainty that this fight won't be back before voters and markets in seven months.
"We're running out of runway; we're almost at the edge," Treasury Secretary Timothy Geithner told "Fox News Sunday." "The idea that we're going to spend another seven months lifting the cloud of default from the American economy, it seems an irresponsible approach. It would be bad for the economy. And we don't think that makes sense — and there's no reason why we have to do it that way.
