Carolyn Kaster, Associated Press
WASHINGTON — Hope dimming for a broad debt-limit deal, Congress and the White House scrambled Wednesday to salvage deficit-reduction talks while top congressional Republicans said the nation cannot afford to default on its obligations — for economic reasons and their party's own good.
Ahead of a fourth negotiating session at the White House in as many days, Senate Republican leader Mitch McConnell defended his proposal to give President Barack Obama new powers to increase the nation's borrowing limit without GOP support.
"I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy," McConnell said on a radio talk show, contending that letting the nation go into financial default would give Obama reason to blame Republicans for the negative fallout.
House Speaker John Boehner added his own warning against default, even as he expressed frustration with the White House over its role in negotiations to trim long-term federal deficits.
"Nobody wants to go there, because nobody knows what's going to happen," he said of a potential financial default. "It's a crapshoot."
In comments to a small group of reporters, Boehner said he has not been able to get commitments from the president and his White House team about cutting big entitlement programs. He said that "dealing with them the last couple months has been like dealing with Jell-O."
McConnell's and Boehner's remarks came amid a flurry of debt-related developments Wednesday that reflected the rising urgency of an Aug. 2 deadline to increase the government's borrowing authority or fall into a first-ever default.
Federal Reserve Chairman Ben Bernanke warned lawmakers that their failure to raise the nation's borrowing limit could trigger a major financial crisis. He said that if the government defaults on its debt, it would throw "shock waves through the entire financial system."
Adding pressure, the Treasury Department said Wednesday the federal budget deficit was on pace to break the $1 trillion mark for a third straight year. The deficit totaled $971 billion for the first nine months of the budget year. With three months to go, this year's deficit will probably top last year's $1.29 trillion, according to the Congressional Budget Office.
In one hopeful sign for compromise seekers, Republican Sen. Tom Coburn said he might rejoin the so-called Gang of Six, the bipartisan group of senators who have been working for months to reach a bipartisan agreement on a big deficit-cutting deal that would blend spending cuts with a tax code overhaul.
And several lawmakers initiated steps that they said were designed to ease the impact of a default.
McConnell's proposal stood as the most ambitious effort to address the debt limit if negotiations between the White House and congressional leaders fail.
The plan would, in effect, guarantee Obama requests for new government borrowing authority unless Congress mustered veto-proof majorities to deny him. The plan would permit Obama to secure increases in the debt ceiling — needed for the government to pay its debts — and would let Republicans avoid politically damaging votes.
While McConnell appeared to accept the dire consequences of a government default, a group of conservative lawmakers discounted their own leaders' fears that defaulting on the nation's debt would be disastrous.
GOP presidential hopeful Michele Bachmann was one of three House members Wednesday who disputed Obama's assertion that a default would mean that Social Security recipients might not receive their checks after Aug. 2. The Social Security Trust Fund is financed by government securities — the ones that the government would not be able to guarantee in a default.
A two-hour negotiating session Tuesday produced no progress after a day of poisonous exchanges between Democrats and Republicans.
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