White House: Debt talks moving into 'difficult days'

Obama's chief of staff expresses confidence that Congress will act in time to raise the debt ceiling, adding solution is crucial to world markets; Boehner: Republicans will act alone if bipartisan deal proves impossible.

July 24, 2011 17:45
2 minute read.
Obama and Boehner meet to discuss US debt crisis

Obama Boehner 311. (photo credit: REUTERS)


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WASHINGTON - White House Chief of Staff Bill Daley said on Sunday that negotiations over the US debt limit and deficit reduction were moving into "difficult days" and said it was crucial to market confidence to get a deal done soon.

Speaking on the NBC program "Meet the Press," Daley expressed confidence that Congress would act in time to raise the debt ceiling because congressional leaders have all said default is not an option.

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Daley added, however, that markets around the world are waiting to see if US officials can reach an agreement.

"We are now getting to a point where markets around the world will question whether the political system can come together and compromise for the greater good of the country," he said.

Daley said the White House wants a deal struck that would raise the debt ceiling by enough so that another vote is not needed before the November 2012 elections.

He said the White House is open to a two-step process in which some deficit savings are agreed upon later this year or early next year.

"This has to be two steps," he said. "But the second step must get us through '13 without having to go through this ridiculous fight over extending the debt ceiling."

Republican US House of Representatives Speaker John Boehner said on Sunday that he would prefer to unveil a bipartisan deal to raise the debt ceiling and that his last offer to Obama was still on the table.

"The preferable path would be a bipartisan plan that involves all the leaders, but it is too early to decide whether that's possible," Boehner said on Fox News Sunday. "If that's not possible, I and my Republican colleagues in the House are prepared to move on our own."

He also said that raising the debt ceiling and implementing major reforms would have to be done in two stages. "There is going to be a two-stage process. It is not physically possible to do all of this in one step."

Boehner said his offer that included some $800 billion in new tax revenue and massive spending cuts was never withdrawn. That plan was dubbed the "grand bargain" despite his decision to walk away from negotiations with Obama last week.

"I don't know, it may be pretty hard to put Humpty Dumpty back together again. My last offer is still out there. I've never taken my last offer off the table," Boehner said, noting that the White House never has agreed to it.

At the moment, however, Boehner said that the better path was working with his congressional colleagues "to put together a process" that is do-able.

US Treasury Secretary Timothy Geithner said on Sunday that after careful review it was not an option for President Barack Obama to raise the debt ceiling on his own by invoking constitutional authority.

"It is not a workable option," Geithner said on the ABC program "This Week." "This is not a workable option to limit the damage to the American people that would come from Congress not acting to raise the -- to avoid a default crisis."

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