Political Deadlock Persists as Debt Ceiling Deadline Approaches

"We are obviously running out of time," President Obama said.

July 16, 2011, 7:14 AM

July 16, 2011— -- Despite holding his second news conference in a week, it doesn't look like President Obama will get the "grand bargain" to raise the country's debt ceiling and avoid default.

"We are obviously running out of time," President Obama said. "And so what I've said to the members of Congress is that, 'You need, over the next 24 to 36 hours, to give me some sense of what your plan is to get the debt ceiling raised, through whatever mechanisms they can think about, and show me a plan in terms of what you're doing for deficit and debt reduction.'"

While President Obama criticized Republicans for not being willing to compromise on tax revenues, Congressional Republican leaders shot back by saying the president hasn't presented any serious proposals to solve the debt crisis.

"We asked the president to lead. We asked him to put forward a plan -- not a speech, a real plan -- and he hasn't," Speaker of the House John Boehner said. "We will."

Republican leadership announced Friday that the House of Representative will consider alternative legislation to solving the debt ceiling next week.

The legislation—called Cut, Cap and Balance—would raise the debt ceiling while cutting discretionary spending by $111 billion in the 2012 fiscal year, capping spending over the next ten years, and amend the Constitution to require a balanced budget.

But some Republicans on Capitol Hill, such as Representative Paul Broun (R-Ga.), say they aren't willing to discuss any plan that would lead to raising the debt ceiling.

Rep. Broun told ABC's Jonathon Karl that he would vote against any legislation that would raise the ceiling, "no matter what."

It's because of stances like these in the Republican Party that another plan presented this week by Senate Minority Leader Mitch McConnell has been gaining attention.

The plan would give the president the authority to raise the debt ceiling, while bypassing the necessity for Congress to vote for the measure.

The Daily Beast's John Avlon says he sees McConnell's plan as a sign that Republican leadership is having difficulty reconciling internal divisions.

"He [McConnell] wasn't sure he could get the votes he needs to raise the debt ceiling out of the republican caucus and that this was in fact an attempt to delegate this to the president—very unusual for congress to ever delegate power to a president," Avlon said in an interview with ABC News.

The president is dealing with internal party divisions of his own. While the president says he's willing to make some difficult concessions in reaching a deal, he may have difficulty convincing his own party to go along.

House Democratic Leader Nancy Pelosi said Friday that Democrats will not sign onto a deal that cuts into Medicare or Social Security.

"Whatever happens, we will not be reducing benefits to Medicare and Social Security recipients," Pelosi said.

If political leaders fail to reach an agreement by the Aug. 2 deadline, the government would be unable to pay 40 percent of its bills, which would cause interest rates to rise throughout the country, affecting mortgages, credit cards, and other personal loans.

There will also be implications in the international financial markets, as credit rating agencies would downgrade the U.S. debt rating.

"Everyone is entitled to their own opinion but not their own facts, and the facts are that if you do not raise the debt ceiling, and America defaults on its debt, we will be in a deeper fiscal hole almost overnight," John Avlon said.

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events