With Asian markets set to deliver a verdict within hours on the U.S. debt crisis, House Speaker John Boehner, R-Ohio, said on Sunday morning that he was prepared to advance a House debt-ceiling plan without Democratic support.
Boehner said he would prefer to have bipartisan backing for a two-tiered framework, comprised first of a savings package then a pass at reforms to entitlement programs and the tax code.
"If that's not possible, I and my Republican colleagues in the House are prepared to move forward on our own ... today," he said. Boehner said he would develop a package "within the principles of Cut, Cap and Balance."
He refused to nail the coffin on a so-called grand bargain that he and President Obama had been negotiating, but said during a Fox News Sunday appearance, "It may be pretty hard to put Humpty Dumpty together again." He said he was focused on a package that was "doable at the 11th hour."
The more such a plan relies on House GOP support, the less likely it would be to clear the Senate. Democrats in the House, Senate, and White House have all signaled unwillingness to sign off on a debt-ceiling hike that does not carry into 2013.
The nation faces an August 2 deadline to boost its $14.3 trillion debt ceiling. Analysts have warned that even a short-term extension of the borrowing limit could still result in market turmoil. Standard & Poor's has placed the odds of a U.S. credit rating downgrade, resulting in higher interest rates and rattling investor confidence, at 50/50.
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Obama is "absolutely" still actively involved in debt-ceiling negotiations with Congress, Treasury Secretary Timothy Geithner said on Sunday morning, as Washington dashes to avert a financial crisis brought on by defaulting on its credit.
Geithner laid out two paths: a two-tiered approach involving a savings package followed by a tax code and entitlement reform, and another option that hews to the "grand bargain" that Obama and Boehner had been hashing over before talks fell apart late on Friday.
Appearing on CNN's State of the Union, Geithner said Obama had remained engaged with congressional leaders on Saturday, even after the public talks had shifted to congressional leaders in the Capitol.
"Both sides are getting a lot closer," Geithner said.
Investor confidence, Geithner said, "will start to erode the longer we wait."
Asked by CNN's Candy Crowley whether that erosion could begin to occur today, when Asian markets open in the afternoon, the secretary replied, "You can't tell."
There were signs of progress late on Saturday: Both Democrats and Republicans say they are prepared to accept a two-step process for cutting the federal deficit by up to $3 trillion, but are at odds over whether the debt limit should be in one step that gets past the November 2012 election, or in two increments.
Boehner is pushing a plan that would raise the debt ceiling by $3 trillion or more in two steps or tranches, with both debt-ceiling increases allowed only if matching spending cuts are identified. The total of $3 trillion or more in cuts, through two steps of $1.5 trillion or more, is the plan Boehner suggested on a call Saturday with House Republicans, congressional aides in both parties said.
On Fox, Boehner said talks had fallen apart after Obama repeatedly demanded $400 billion in new revenues over 10 years, tacked onto an agreement of $800 billion in new revenue through what Boehner termed a "flatter, fairer" tax code. Boehner said his $800 billion offer was still on the table.
Image credit: John Boehner, Facebook
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