Lawmakers snipe, Wall Street frets as deadline nears

The White House argued that the total was closer to $1.7 trillion over 10 years when counting about $240 billion in reduced interest payments from the lowered debt.

Earlier, in comments to a small group of reporters before the White House session, House Speaker John Boehner complained that negotiating with the White House "the last couple months has been like dealing with Jell-O."

Democratic officials have portrayed the White House as the more flexible party in the negotiations, willing to cut cherished programs like Medicare, Medicaid and Social Security, provided Republicans agree to some increases in revenue. Thursday's meeting was to focus on spending cuts in the two health care programs and on new tax revenue.

With talks reaching a critical stage without real breakthroughs, some Republican and Democratic lawmakers were looking at a plan proposed by McConnell that would give Obama new powers to overcome Republican opposition to raise the debt ceiling.

The proposal would place the burden on Obama to win debt ceiling increases up to three times, provided he was able to override congressional vetoes — a threshold Obama could manage to overcome even without a single Republican vote and without massive spending cuts. Conservatives promptly criticized the plan for giving up the leverage to reduce deficits. But the plan raised the prospect of combining it with some of the spending cuts already identified by the White House in order to win support from conservatives in the House.

In an interview with radio talk-show host Laura Ingraham, McConnell described his plan in stark political terms, warning fellow conservatives that failure to raise the debt limit would probably ensure Obama's re-election in 2012. He predicted that a default would allow Obama to argue that Republicans were making the economy worse.

"You know, it's an argument he has a good chance of winning, and all of a sudden we (Republicans) have co-ownership of a bad economy," McConnell said. "That is a very bad positioning going into an election."

The proposal won praise from two disparate points in the political spectrum — Republican Sen. John McCain of Arizona and Democratic leader Reid of Nevada.

"I am heartened by what I read," Reid said. "This is a serious proposal. And I commend the Republican leader for coming forward."

McConnell's plan was even winning some consideration in the White House. Democratic officials said that even as Obama confronted Cantor and Boehner in Wednesday's meeting, he commended McConnell.

"Sen. McConnell at least has put forth a proposal," a Democratic official quoted the president as saying. "It doesn't reduce the deficit and that's what we have to do. It just deals with the debt limit. Now Sen. McConnell wants me to wear the jacket for that."

The officials said Obama went on to say they all had a responsibility to find a compromise.

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Associated Press writers Dave Espo, Laurie Kellman, Ben Feller and Erica Werner contributed to this report.