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Obama puts pressure on Republican congressional leadership for debt limit deal

WASHINGTON — President Barack Obama bluntly told Republican congressional leaders Wednesday they must compromise quickly if the government is to avoid an unprecedented default, reportedly warning, "Don't call my bluff" by passing a short-term debt limit increase he has threatened to veto.

The warning, directed at House Majority Leader Eric Cantor, R-Va., marked an acrimonious end to a two-hour negotiating session at the White House. More talks are set for today.

Republicans said Obama had abruptly walked out in an agitated state; Democrats described the president as having summed up with an impassioned case for action before bringing the meeting to a close and leaving.

Cantor said he raised the idea of taking what savings could be achieved now — roughly $1.4 trillion — and then having additional votes to raise the debt limit again before the elections in November 2012, with Republicans seeking a total of at least $2.4 trillion in cuts with no tax increases.

Cantor quoted the president as saying: "Eric, don't call my bluff. I'm going to the American people with this."

Then, Cantor said, "He shoved back and said, 'I'll see you tomorrow' and walked out."

Obama had set a deadline of Friday for the two sides to determine whether they could reach a broad budget deal, Democrats said. If not, he said, they will turn to finding an accord over how to raise the debt limit without agreement on taxes and spending.

Republicans drew another warning from an unlikely source: the party's Senate leader, Sen. Mitch McConnell of Kentucky.

In an interview with radio talk-show host Laura Ingraham, McConnell warned fellow conservatives that failure to raise the debt limit would probably ensure Obama's re-election in 2012.

McConnell predicted that if Congress fails to act, Obama will argue "that Republicans are making the economy worse and try to convince the public, maybe with some merit, if people start not getting their Social Security checks and military families start getting letters saying their service people overseas don't get paid.''

At the Capitol, lawmakers advanced their own fallback measures in case the bipartisan compromise talks fail.

One version, from Sen. Bill Nelson, D-Fla., is designed to make sure Social Security benefits are paid on time. Another, unveiled by three House conservatives, including presidential candidate Michele Bachmann, would give priority to paychecks for members of the armed forces.

Information from the Associated Press and New York Times was used in this report.

U.S. bond rating could decline

With a threatened default less than three weeks away, Moody's Investors Service announced it was reviewing the U.S. bond rating for a possible downgrade. Moody's released its announcement after the U.S. financial markets had closed for the day. Six weeks ago, the firm had announced that a rating review would be likely in mid-July unless there was progress in negotiations to raise the debt limit.

Associated Press

Obama puts pressure on Republican congressional leadership for debt limit deal 07/14/11 [Last modified: Thursday, July 14, 2011 12:30am]

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