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Obama warns GOP leaders: 'Don't call my bluff'

By David Espo And Andrew Taylor

Associated Press

Published: Wednesday, July 13 2011 10:31 p.m. MDT

Democratic officials said that in fact, Cantor had twice earlier in the meeting raised the possibility of a short-term bill, and that he interrupted the president mid-sentence to do so a third time.

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

One version, authored by Sen. Bill Nelson, D-Fla., was designed to make sure Social Security benefits are paid on time. Another, unveiled by a trio of House conservatives, would give priority to paychecks for members of the armed forces.

Without an increase in government borrowing authority by Aug. 2, Treasury Secretary Tim Geithner has warned, there could be a default posing a catastrophic risk to the economy, still recovering from the worst recession in decades.

At least in part, McConnell's comments were a rebuttal to conservatives who criticized his proposal on Tuesday to let Obama raise the debt limit without a vote of Congress.

Presidential hopeful Newt Gingrich called that idea an "an irresponsible surrender to big government, big deficits and continued overspending," and Ingraham said she had received emails from conservative listeners likening McConnell to Pontius Pilate.

The Republican lawmaker brushed aside the biblical reference. But without mentioning Gingrich by name, he referred to two government shutdowns of 1995 that the one-time House speaker engineered in hopes of winning deep spending cuts from a Democratic president.

The tactic backfired politically on Gingrich and the Republicans, and benefited President Bill Clinton.

Some Democrats couldn't resist the temptation to jab at Republicans.

"You have the Republicans who walked out of the Biden talks. You have the speaker of the House who's close to entering into a framework agreement with the president of the United State walk out because other Republicans in the House undercut him," said Rep. Chris Van Hollen, D-Md., a participant in the talks led by Vice President Joe Biden.

"And now you have Republicans trashing a proposal put forward by the Republican leader in the Senate."

Nelson's proposal was designed to ensure that Social Security recipients receive their checks in the event of a default, mandating that the program's obligations no longer count against the overall debt limit.

He acted one day after Obama cautioned that he could not guarantee the checks would go out if there was a default.

On the other side of the Capitol, Republican Reps. Steve King of Iowa, Louie Gohmert of Texas and Michele Bachmann of Minnesota, a presidential candidate, said if the debt ceiling is reached, the Treasury should fund pay any allowances for members of the armed forces first and obligations on the public debt second, ahead of all other expenses.

Congressional Republicans have had a relatively muted response to McConnell's debt limit proposal. Privately, though, conservative lawmakers have been critical, accusing him of giving up the leverage the GOP has to force Obama into making deep spending cuts as the price for an increase in the debt limit.

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