President Obama would consider a short-term measure aimed at raising the nation’s debt ceiling and avoiding a default by Aug. 2 if Congress agrees to a larger, long-term deficit-reduction and debt-ceiling deal and needs “a few days” to finalize the legislation, his spokesman said Wednesday.
With time running out for reaching such a deal, Obama called House and Senate Democratic leaders to a White House meeting Wednesday as he sought to shore up his party’s support for a compromise deficit-reduction plan that could help break a political impasse over the debt limit and avert a U.S. default.
Our mountain of debt: Foreign investors hold the largest share of the national debt. Estimated foreign holdings of U.S. Treasury securities have more than quadrupled since 2001. Some experts worry about the geopolitical consequences of foreign governments investing so deeply in U.S. Treasurys. But the investments also tie the fortunes of foreign governments more closely to those of the United States.
July 20 (Bloomberg) -- U.S. Senators Kent Conrad, a North Dakota Democrat, and Thomas Coburn, an Oklahoma Republican, both members of the so-called Gang of Six senators working on a bipartisan deficit-cutting plan, talk about the current proposal and the need for compromise.
Later, Obama was scheduled to confer at the White House with the top two House Republicans: Speaker John A. Boehner (Ohio) and Majority Leader Eric Cantor (Va.).
Obama has steadfastly refused to entertain proposals to temporarily lift the debt limit during tense negotiations with congressional leaders over the past several weeks. But with less than two weeks remaining before economists say the government would risk defaulting on its obligations if the debt ceiling were not raised, the administration appeared to recognize the time constraints that could prevent a larger “grand bargain” from being enacted.
“The president has been clear that he will not support a short-term extension of the debt ceiling,” White House spokesman Jay Carney said. But he added: “What we mean by that is we would not support a short-term extension absent an agreement to a larger deal. That’s not acceptable. Obviously, if both sides agree to something significant, we will support the measures needed to finalize the details of that.”
In response to questions, Carney said later, “But there is no extension without an agreement on something big — a firm, committed agreement on something big.”
Obama has continued to push for a larger deficit-reduction package that includes a mix of reduced spending and increased revenues through changes to the tax code. A bipartisan group of senators called the “Gang of Six” submitted a package that would reduce the deficit by $3.7 trillion, a proposal the administration hailed as a step in the right direction. Carney declined to talk about specifics of the proposal but said Obama was encouraged by the group’s approach.
Carney said Obama will not sign a series of short-term increases to the debt ceiling as stop-gap measures, which he said would “cast doubt” on the willingness of the United States to honor its obligations. He drew a distinction between such short-term measures and a “backup plan” to raise the debt ceiling in three phases extending more than a year and totaling about $2.5 trillion. This plan is being worked out between Senate Minority Leader Mitch McConnell (R-Ky.) and Senate Majority Leader Harry M. Reid (D-Nev.). Carney said Obama could sign such a fallback plan because, under it, the three phases would be guaranteed and the debt ceiling would be raised “into 2013.”
Carney said: “We are not wavering on the president’s absolute assertion that he won’t sign . . . a toll booth kind of series of provisions that temporarily or in a limited fashion raise the debt ceiling, and we have to relitigate this again and again and again.”