Obama bid to salvage debt deal

Washington, July 23: With a little more than a week remaining before the federal government risks defaulting on its debts, Congressional leaders and top aides worked on Saturday to assemble a proposal that would allow a badly divided Congress to increase the federal debt ceiling and avert a potentially crippling economic shock. Congressional leaders went to the White House for a Saturday morning meeting called by the President on Friday night to discuss options for moving forward with the negotiations. But senior Congressional aides said privately that despite the White House session, the serious talks about a solution were now under way among top members of the Congress. Aides said talks between senior advisers to the House and Senate leaders began as soon as it became clear that negotiations on Friday between President Obama and the House speaker, John A. Boehner, over a major budget agreement had broken down, leaving the Congress with no clear route to a debt limit increase. Leaders of the House and Senate now have only days to come up with a solution that has eluded them for months, considering ways to get a debt increase through a Republican-controlled House packed with conservatives demanding deep cuts and no new revenues. They must do so in a way that reassures markets that may be jittery after the halt in the talks just days before the August 2 deadline. The drama played out in real time on television Friday night in extraordinary exchanges between the President and Boehner, who has told his colleagues that the House needs to begin moving by Monday to give the Senate time to act. In his weekly address, Obama urged Republicans to accept new revenues — a key sticking point in the negotiations — as a way to balance the cuts that he said were serious. “We can come together for the good of the country and reach a compromise; we can strengthen our economy and leave for our children a more secure future,” he said. “Or we can issue insults and demands and ultimatums at each another, withdraw to our partisan corners and achieve nothing,” he added. Republicans countered the emphasis needed to be on cutting government spending. “If we’re going to avoid any type of default and downgrade — if we’re going to resume job creation in America — the president and his allies need to listen to the people and work with Republicans to cut up the credit cards once and for all,” said Representative Jeb Hensarling of Texas, a member of the Republican leadership, who delivered his party’s weekly address.