"The president appreciates Senators Reid and McConnell trying to solve the immediate problem. It's important that everyone in the room agreed that default is not an option. However, this remains a fallback option," said a Democratic official familiar with the talks, who said there was "very little" discussion of the proposal in Thursday's meeting.
The Reid-McConnell backup plan sends a positive signal to Wall Street that default appeared less likely, despite the public standoff in the negotiations. If McConnell and Reid can craft a deal that the White House can sign off on, and the Senate can pass, it would create enormous political pressure on the House. Such a scenario would give headaches to House GOP leaders.
No wonder then that House Speaker John Boehner, R-Ohio, conceded on Thursday that a version of the McConnell plan could ultimately become the vehicle to raise the debt ceiling. "I think it's worth keeping on the table," he said. "There are a lot of options that people have floated. And frankly, I think it's an option that may be worthy at some point." Senate leadership aides said Reid, through House Minority Whip Steny Hoyer, D-Md., has kept House Democrats apprised of his efforts and they are supportive. Minority Leader Nancy Pelosi, D-Calif., said: "I think everyone who's concerned about lifting the debt ceiling is saying bravo for Senator McConnell to say this must be done," she said.
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Administration officials, including Treasury Secretary Timothy Geithner, who was at Thursday's meeting, have said a plan to raise the nation's $14.3 trillion debt ceiling needs to be in place by August 2, or the country risks defaulting on some of its bills. Obama and congressional leaders will not meet on Friday, but could meet again sometime during the weekend.
Obama said he and his staff would be "on call" during this time.
Few other details of the meeting were immediately known, though it was described as "polite." House Majority Leader Eric Cantor, R-Va., who had a blowup with Obama in Wednesday's meeting, did not say a word in Thursday's meeting, according to Democratic aides.
For his part, Geithner warned the group that the world financial markets' concerns are two-fold: the debt ceiling must be raised, and a plan must be put in place to deal with the deficit and debt, said one GOP aide.
Image credit: Jim Young/Reuters