State of Play: Debt Limit Showdown Intensifies as Deadline Looms

By John R Parkinson

Jul 18, 2011 3:35pm

ABC News’ John R. Parkinson (@JRPabcDC) reports:

With a little more than two weeks to go until expiration of the Treasury Department’s deadline to increase the statutory debt limit, negotiations on how to avoid a default are going on in secret and behind closed doors as President Obama met with House Speaker John Boehner and House Majority Leader Eric Cantor at the White House on Sunday morning. 

Despite repeated inquiries throughout the weekend, knowledge of the stealthy meeting was limited until Monday and none of the leaders has revealed any details about the nature of the discussion. 

While the negotiations carry on in private, there is a public fight in Washington over a Republican proposal that would quickly balance the budget, but also incur steep cuts in Medicare and Social Security. 

Despite facing a presidential veto threat, Boehner says the House of Representatives will move forward with its plan to pass the Cut, Cap and Balance legislation Tuesday and said that the hard-line position from the White House “should make clear that the issue is not congressional inaction, but rather the president’s unwillingness to cut spending and restrain the future growth of our government.” 

“It’s disappointing the White House would reject this common-sense plan to rein in the debt and deficits that are hurting job creation in America. While American families have to set priorities and balance their books, this White House obviously isn’t serious about making the same tough choices,” Boehner, R-Ohio, said in a statement today. “While the House is once again acting responsibly, the Administration still won’t say what cuts it’s willing to make to end Washington’s spending binge and the economic uncertainty it’s creating. 

If we are going to raise the debt limit and avoid default, the White House must be willing to demonstrate more courage than we have seen to date. The House will proceed as planned with its vote on the Cut, Cap and Balance Act,” he added.

The White House says the bill would “lead to severe cuts in Medicare and Social Security” and claims that the Balanced Budget Amendment [BBA] “will likely leave the Nation unable to meet its core commitment of ensuring dignity in retirement” in the future.

“What we are witnessing here with this measure is classic Washington posturing, Kabuki theater,” White House press secretary Jay Carney said. “This is a measure that is designed to duck, dodge and dismantle:  duck responsibility, dodge obligations and dismantle eventually if enshrined into law, which it will not be.” 

Cantor, however, called the measure “a common sense proposal” and said it would cut and cap federal spending while amending the constitution with the BBA “to ensure that Washington begins to live within its means.” 

As Boehner was leaving the House floor this afternoon, I asked him for details about his meeting with Obama and Cantor, R-Va., Sunday morning at the White House and pressed him to elaborate on his written rebuttal to the president’s veto threat. But Boehner showed discipline and was tight-lipped. 

“I don’t talk to you guys in the hall, you know that,” Boehner answered. “I’m not going to talk to you. I can’t do it. If I do I won’t be able to walk through the halls.” 

Boehner spokesman Michael Steel said, “As we said throughout the weekend, the lines of communication are being kept open, but there is nothing to report in terms of an agreement or progress. “We believe Cut Cap and Balance represents the best path forward and we’re looking forward to the House vote on it tomorrow.” 

The House is set to vote on Cut, Cap and Balance legislation Tuesday evening. The bill would cut total spending by $111 billion in FY 2012 and cap total federal spending by creating a “glide path” that limits spending to 22.5 percent of GDP next year, and gradually decreases spending  levels over 10 years until locking them in at 19.9 percent of GDP in 2021. Finally, the legislation would require that Congress pass a Balanced Budget Amendment and it would need to be sent to the states for ratification before the president’s request for a debt limit increase is granted. 

“No one wants to default on our debt, and that is why House Republicans are bringing forth this plan to meet the president’s request for a debt limit increase with the necessary safeguards to make sure that we don’t continue to kick the can down the road,” Cantor said in a written statement. “With millions of Americans out of work, we need to get the economy growing again and control spending here in Washington, and Cut, Cap and Balance is a path forward to do just that. As President Obama has not put forth a plan that can garner 218 votes in the House, I’d caution him against so hastily dismissing Cut, Cap and Balance.” 

Senate Majority Leader Harry Reid of Nevada announced earlier today that he will keep the Senate in session every day – including weekends – until Congress sends Obama legislation to avoid a defaulting on the nation’s debts. 

The Senate will likely vote on Cut, Cap and Balance and a separate balanced budget amendment later this week. Both measures are expected to fail in the upper chamber, and then the Senate will take up the "last choice" McConnell/Reid compromise, which would allow the president to gradually raise the debt ceiling between now and the election without spending cuts and without the approval of congressional majorities. 

ABC News’ Jonathan Karl contributed to this report

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