WASHINGTON (Reuters) – Senator Mitch McConnell’s plan to avert an imminent U.S. debt default could lead to a day of reckoning for his Republicans as they weigh the prospect of fiscal disaster against the demands of Tea Party activists.

With other efforts to raise the federal government’s debt ceiling at a standstill, McConnell’s “Plan B” to avoid default is increasingly seen as “Plan A” in Washington.

The proposal by the top Republican in the Senate would dump the task into the laps of President Barack Obama and his Democrats, forcing them to back a $2.4 trillion increase in borrowing before the November 2012 elections as recession-weary voters worry about the country’s growing mountain of debt.

Pinning the debt increase on Obama and the Democrats could help McConnell pick up the four seats needed to win Republican control of the Senate and further his stated goal of making Obama a one-term president.

It also may ensure his party avoids getting blamed for an August 2 default that could push the United States back into recession and upend financial markets across the globe.

Surprisingly, Democrats have embraced the plan as the best possible way to get an increase in the debt ceiling through a divided Congress.

Obama could also turn the situation to his advantage.

WASHINGTON (Reuters) – The latest Republican plan to avert a looming U.S. default is a fierce statement of conservative principles that pushes the party’s negotiating position farther to the right.

That’s why it may be the first step on the road to compromise.

By giving Tea Party conservatives in the House of Representatives a chance to take their favored legislation as far as it will go, House Speaker John Boehner may buy himself some needed goodwill from a vocal segment of his party that has sometimes viewed his deal-making efforts with suspicion.

That could make it easier for Boehner to eventually pass legislation that could be acceptable to President Barack Obama and the Democratic-controlled Senate, clearing the way for an increase in the debt ceiling before August 2 when the federal government faces a default on its financial obligations.

Even as Boehner touted his party’s latest plan at a news conference Friday, he left open the possibility that the House may take up a compromise being shaped in the Senate that so far has failed to catch on with junior lawmakers.

“The cut, cap and balance plan that the House will vote on next week is a solid plan for moving forward. Let’s get through that vote, and then we’ll make decisions about what will come after,” he said at a news conference.

The cut, cap and balance bill conditions a debt-limit increase on passage of a constitutional amendment that would require the federal government to balance its books each year.

WASHINGTON (Reuters) – The latest Republican plan to avert a looming U.S. default is a fierce statement of conservative principles that pushes the party’s negotiating position farther to the right.

That’s why it may be the first step on the road to compromise.

By giving Tea Party conservatives in the House of Representatives a chance to take their favored legislation as far as it will go, House Speaker John Boehner may buy himself some needed goodwill from a vocal segment of his party that has sometimes viewed his deal-making efforts with suspicion.

That could make it easier for Boehner to eventually pass legislation that could be acceptable to President Barack Obama and the Democratic-controlled Senate, clearing the way for an increase in the debt ceiling before August 2 when the federal government faces a default on its financial obligations.

Even as Boehner touted his party’s latest plan at a news conference on Friday, he left open the possibility that the House may take up a compromise being shaped in the Senate that so far has failed to catch on with junior lawmakers.

“The cut, cap and balance plan that the House will vote on next week is a solid plan for moving forward. Let’s get through that vote, and then we’ll make decisions about what will come after,” he said at a news conference.

The cut, cap and balance bill conditions a debt-limit increase on passage of a constitutional amendment that would require the federal government to balance its books each year.

WASHINGTON (Reuters) – President Barack Obama and congressional leaders pressed ahead with private talks on deficit reduction on Saturday, seeking an as-yet-elusive way to lift the debt ceiling and avoid a U.S. default next month.

Congress must raise the $14.3 trillion limit on U.S. borrowing by August 2 or the government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession.

Republicans want a deficit-cutting deal in order to raise the debt limit, but they disagree with Democrats on how to do it. The White House wants some tax increases on wealthier Americans to be part of a package; Republicans reject that.

Prospects for a deal any time soon appear unlikely. The House and Senate were expected to spend much of next week debating budget-related measures that have little chance of becoming law.

On Thursday evening, Obama gave lawmakers a Saturday deadline to come up with a plan to go forward and suggested he could call for further talks over the weekend if needed.

No new talks were scheduled, however, according to Republican and Democratic aides.

A White House official said Obama, Vice President Joe Biden, and other administration officials were “in frequent communication” with congressional leaders and staff, discussing “various options.”

WASHINGTON (Reuters) – President Barack Obama will decide on Saturday whether to summon lawmakers for a new round of debt and deficit talks, weighing the chances of progress as both sides stick to their positions on spending and taxes.

Congress must raise the $14.3 trillion limit on U.S. borrowing by August 2 or the government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession.

The top two Republicans in the House of Representatives, John Boehner and Eric Cantor, met on Friday with Treasury Secretary Timothy Geithner and Bill Daley, the White House chief of staff.

But prospects for a deal anytime soon appear unlikely, as the House and Senate were expected to spend much of next week debating measures that have little chance of becoming law.

Republicans want a deficit-cutting deal in order to raise the debt limit, but they disagree with Democrats on how to do it. The White House wants some tax increases on wealthier Americans to be part of a package; Republicans reject that.

“The truth is, you can’t solve our deficit without cutting spending,” Obama said in his weekly radio and Internet address on Saturday.

“But you also can’t solve it without asking the wealthiest Americans to pay their fair share — or without taking on loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get.”

WASHINGTON, July 16 (Reuters) – President Barack Obama will decide on Saturday whether to summon lawmakers for a new round of debt and deficit talks, weighing the chances of progress as both sides stick to their positions on spending and taxes.

Congress must raise the $14.3 trillion limit on U.S. borrowing by Aug. 2 or the government will run out of money to pay its bills, causing turmoil in global financial markets and potentially forcing the United States into another recession.

The top two Republicans in the House of Representatives, John Boehner and Eric Cantor, met on Friday with Treasury Secretary Timothy Geithner and Bill Daley, the White House chief of staff.

But prospects for a deal anytime soon appear unlikely, as the House and Senate were expected to spend much of next week debating measures that have little chance of becoming law.

Republicans want a deficit-cutting deal in order to raise the debt limit, but they disagree with Democrats on how to do it. The White House wants some tax increases on wealthier Americans to be part of a package; Republicans reject that.

“The truth is, you can’t solve our deficit without cutting spending,” Obama said in his weekly radio and Internet address on Saturday.

“But you also can’t solve it without asking the wealthiest Americans to pay their fair share — or without taking on loopholes that give special interests and big corporations tax breaks that middle-class Americans don’t get.”

WASHINGTON, July 15 (Reuters) – Amid the sound and fury of the debt-ceiling debate, the most influential person may be the one who didn’t say a word in public on Friday.

Senate Republican Leader Mitch McConnell stayed away from microphones and bright lights on Friday as President Barack Obama and House Speaker John Boehner accused each other in dueling news conferences of not having a “serious” plan to avert an imminent default.

The Senate was officially out of session, but Democratic and Republican staffers continued work on McConnell’s plan that may yet steer the ship of state away from the iceberg of fiscal disaster.

That plan, described as a “backup” by McConnell when he introduced it on Tuesday, is increasingly seen as the only possible way to agreement in a rancorous partisan environment.

Obama and Boehner haven’t exactly embraced the plan, but they’re not dismissing it either. Obama said it would “at least avert Armageddon” — which at this stage in the debate might count as a victory.

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WASHINGTON (Reuters) – President Barack Obama and Republicans traded demands for a serious deficit plan on Friday, as an acrimonious stalemate deepened in negotiations to avert a looming U.S. government default.

Republicans in the House of Representatives said they would vote next week on a bill to raise the debt ceiling by the $2.4 trillion Obama has requested as long as Congress adopts a balanced budget amendment — an unlikely prospect. The measure will consume much of next week.

The vote could placate conservatives and give House Speaker John Boehner more leeway to work out a final compromise with the White House.

Congress must raise the $14.3 trillion limit on America’s borrowing by Aug. 2 or the government will run out of money to pay its bills. Democrats and Republicans were far from a breakthrough on a deficit-reduction deal, making markets increasingly uneasy.

Obama urged his Republican opponents to drop their resistance to higher taxes and agree to a large measure that would include spending cuts and heavier taxes on wealthier Americans. He said he has reluctantly agreed to spending cuts and reforms of popular but expensive social programs and wants Republicans to make concessions as well.

“Show me a plan in terms of what you’re doing in terms of debt and deficit reduction. If they show me a serious plan I’m ready to move even if it requires me to make some tough decisions,” Obama said at a White House news conference.

“We’re running out of time. That’s the main concern that I have at this point,” Obama said.

WASHINGTON (Reuters) – President Barack Obama and Republicans traded demands for a serious deficit plan on Friday, underscoring the lack of progress and acrimony plaguing negotiations to avert a looming U.S. government default.

Obama used a White House news conference to keep the pressure on leaders of Congress to produce a framework for a deficit-reduction plan that will head off a default on Aug. 2.

Five rounds of White House talks this week produced no agreement and much partisan bickering. The talks may resume over the weekend.

“Show me a plan in terms of what you’re doing in terms of debt and deficit reduction. If they show me a serious plan I’m ready to move even if it requires me to make some tough decisions,” Obama said.”

House of Representatives Speaker John Boehner, the top U.S. Republican, said Obama and Democrats had still not put a serious deficit plan on the table.

“They’ve been unwilling to put a real plan on the table. Without serious spending cuts … this problem is not going to be solved,” Boehner said after a meeting of House Republicans.

Congress must raise the $14.3 trillion limit on America’s borrowing by Aug. 2 or the government will run out of money to pay its bills. Republicans have insisted the government commit to cutting the deficit before they sign on for more debt.

WASHINGTON, July 15 (Reuters) – The top U.S. Republican on Friday said President Barack Obama and Democrats had still not put a serious deficit plan on the table, underscoring the acrimony plaguing negotiations to avert a government default.

“They’ve been unwilling to put a real plan on the table. Without serious spending cuts … this problem is not going to be solved,” House of Representatives Speaker John Boehner said after a meeting of House Republicans.

Obama suspended budget negotiations for Friday, telling congressional leaders to come up with a “plan of action” on how to unblock talks meant to cut deficits and avert a U.S. debt default.

Congress must raise the $14.3 trillion limit on America’s borrowing by Aug. 2 or the government will run out of money to pay its bills. Republicans insist on steep spending cuts as part of the deal, but talks have broken down over a sharp divide on taxes.

Obama, who had vowed to meet top lawmakers every day until a deal is reached, gave top Democrats and Republicans until Saturday morning to reconsider their positions in the high-stakes negotiations.

He will hold a news conference Friday at 11 a.m. EDT (1500 GMT) while awaiting feedback on separate meetings on Capitol Hill of the Republican and Democratic caucuses.

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