Today's Coming Crisis Movie

Monday, July 25, 2011

Debt-limit compromise elusive as separate strategies take shape in House, Senate

House and Senate leaders were preparing separate backup plans Sunday to raise the federal debt limit after another day of intense negotiations failed to break a partisan impasse that threatens to throw the government into default next week.

The rival strategies left Congress poised to start this week locked in bitter and messy legislative warfare, even as financial markets were reopening for the first time since House Speaker John A. Boehner (R-Ohio) abruptly abandoned debt-limit talks with the White House on Friday.

Over the weekend, congressional negotiators focused their attention on Boehner’s proposal to raise the debt limit in two stages. Their goal was to make it more palatable to Democrats — particularly President Obama. On Sunday afternoon, they thought they were close.

But after a 6 p.m. powwow at the White House, Obama, Senate Majority Leader Harry M. Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) rejected the emerging compromise, saying it would leave the door open to another wrenching debt-limit battle in just a few months.

“Tonight, talks broke down over Republicans’ continued insistence on a short-term raise of the debt ceiling, which is something that President Obama, Leader Pelosi and I have been clear we would not support,” Reid said in a written statement. “Speaker Boehner’s plan, no matter how he tries to dress it up, is simply a short-term plan, and is therefore a non-starter in the Senate and with the President.” (more)