For several weeks, private negotiations between President Obama and House Speaker John Boehner (R-OH) had been continuing in an effort to pair a comprehensive, multi-trillion-dollar deficit reduction plan with an increase in the debt ceiling that would extend through the 2012 elections. As of yesterday, those discussions are seemingly over as once again it appears that the differences over revenues could not be overcome. After media reports indicating that the two sides were close to a deal, the talks broke down and the President and Speaker issued dueling press conferences yesterday offering conflicting accounts of what happened. What is clear is that the prospect of finding a multi-year solution to the deficit issue between now and the August 2 deadline seems slim.
The President has called Congressional leaders back to the White House this morning in an effort to find a way to avoid default. It seems increasingly likely that a short-term increase in the debt ceiling–possibly a few weeks or months long–could be passed in order to buy more time for negotiations, although President Obama remains resistant to this idea. Otherwise, some version of the McConnell-Reid fallback plan could be enacted where a debt ceiling increase of around $2.5 trillion is authorized in two or three increments. But opposition to that plan remains strong in the House, especially among conservatives who believe it hands too much authority to the President.
Today’s meeting could be pivotal in determining a way forward. Speaker Boehner has said that he needs a bill ready by Monday in order to pass it out of the House by mid-week and give the Senate enough time to pass it before next Tuesday’s deadline.