US President Barack told congressional leaders on Saturday to find areas of agreement and draft legislation to avert a catastrophic debt default, with both sides aiming for a deal by Monday.
Obama, a Democrat, held talks at the White House with House of Representatives Speaker John Boehner and other congressional leaders for a bare 50 minutes, a day after Boehner broke off negotiations in a festering dispute over spending and taxes with an Aug. 2 default deadline drawing ever closer.
Nancy Pelosi, leader of the House Democratic minority, said Obama instructed the lawmakers to find where they can come to a deal and that a short-term extension of the US debt ceiling is definitely not being considered. A Senate Democratic aide told Reuters that congressional leaders agreed their staffs would “work together throughout the weekend” to try to craft a deficit-reduction bill to clear the way for a debt limit increase.
A senior Senate aide, speaking before the White House meeting, said the goal will be to work out a deal this weekend and have legislation ready to introduce on Monday. The mood around the table in the White House Cabinet Room appeared strained as Obama, the Democrats and their Republican adversaries sat down a day after negotiations collapsed in acrimony.
Senate Republican leader Mitch McConnell said after the meeting that congressional leaders were working on fresh legislation to prevent a default that would have global economic reverberations and jeopardise America’s Triple-A credit rating. “The president wanted to know that there was a plan for preventing national default. The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending,” McConnell said.
A senior Republican aide said a fallback option initially presented by McConnell would not be the basis of the new bill. New legislation would be aimed at cutting spending, preventing default and not raising taxes, the aide said.
