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Partisan Rancor Heats Up In Debt-Ceiling Talks


It's MORNING EDITION from NPR News. Im Mary Louise Kelly in for Renee Montagne.


And Im Steve Inskeep.

We dont really know if we're any closer to a deal that raises the federal debt limit. In public, the rhetoric is getting stronger.

KELLY: Lawmakers are also having heated discussions in private. After House Republicans met yesterday, one senior lawmaker told the National Review, quote, "Only word comes to mind right now: Chaos."

NPR's Scott Horsley reports on the maneuvering as time to make a deal is growing shorter.

SCOTT HORSLEY: Lawmakers now have less than three weeks to extend the government's borrowing authority, which runs out August 2nd. Otherwise, as President Obama told CBS News, Social Security recipients may not get the money they're expecting the very next day.

President BARACK OBAMA: I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue, because there may simply not be the money in the coffers to do it.

HORSLEY: Despite that dire warning, the administration says it's confident the debt ceiling will be raised. But the path to get there is far from clear. Republican lawmakers had been demanding big cuts in the federal budget deficit.

Longtime political observer, Norman Ornstein, of the conservative American Enterprise Institute, says President Obama effectively called their bet, offering to shave trillions from the deficit through a combination of spending cuts and increased tax revenue.

Dr. NORMAN ORNSTEIN (Resident Scholar, American Enterprise Institute): The president stepped in with something that took Republicans aback, by pushing for a much more ambitious plan and giving them a lot of things that they'd asked for, but demanding something that they didn't want to give up. And they now look like the recalcitrants. So Republicans in both Houses are trying desperately to find a way to shift the blame.

HORSLEY: Republican House speaker John Boehner had been negotiating privately with the president until last Saturday. He backed out when rank-and-file Republicans rejected the idea of any increased tax revenue. Yesterday, Boehner suggested it's up to the president to make the next move.

Representative JOHN BOEHNER (Republican, Ohio, Speaker of the House): This debt limit increase is his problem. And I think it's time for him to lead by putting his plan on the table, something that the Congress can pass.

HORSLEY: President Obama argues it's unfair to cut government programs that help the poor and middle-class, without also asking wealthy Americans to pay more in taxes - beginning in 2013.

White House spokesman Jay Carney says Republicans and Democrats need to work together.

Mr. JAY CARNEY (Press Secretary, White House): If we were to default on our obligations, who suffers - Democrats, Republicans, Or Americans? Americans suffer. The American economy suffers. The global economy suffers.

HORSLEY: Senate Republican leader Mitch McConnell offered little hope for a bipartisan breakthrough. He said on the Senate floor, yesterday, as long as this president is in the Oval Office, a real solution is probably unattainable.

Instead, McConnell proposed what he called a backup plan that would allow the government to keep paying its bills

Senator MITCH MCCONNELL (Republican, Kentucky, Senate Minority Leader): What we're not going to be a party to in the Senate, I'm pretty confident, is default.

HORSLEY: McConnell's proposal would allow the president to raise the debt ceiling on his own, in three installments, over the next year and a half. Lawmakers could vote against the increases, but would only be able to block them with a two-thirds vote. Mr. Obama would also be required to propose spending cuts in amounts equal to the new debt, but Congress would not be required to actually make those cuts.

Political analyst Ornstein criticized McConnell's proposal, it would not limit the government's debt only lawmakers' apparent responsibility for it.

Dr. ORNSTEIN: I suspect what McConnell's trying to do is say you can only do this via spending cuts, and we will wash our hands of those, and then we'll blame you. If that's a formula for saying we're responsible to govern and you should put us in charge of all three branches, I don't think it's a very persuasive one.

HORSLEY: Still, the White House left the door open to something like McConnell's proposal: To preserve the government's borrowing authority should deficit talks break down.

The administration's push for a super-sized deficit-cutting package got some support yesterday from the business community. Major companies and business groups wrote to lawmakers and the president, urging a substantial effort to reduce the deficit, even if it requires tough choices.

Ornstein says while the White House is playing to independent-voters who want a compromise, Congressional Republicans are listening to elements within their base who don't.

Dr. ORNSTEIN: I'm not at all sanguine that we're going to rescue this at the 11th hour. It may be at the 13th hour. But by then, a whole lot of damage will have been done.

HORSLEY: Another round of talks is scheduled later today.

Scott Horsley, NPR news, the White House. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.