Obama: Halt '3-ring-circus,' avert US default

WASHINGTON — In unprecedented back-to-back appearances on nationwide television, President Barack Obama and House Speaker John Boehner clashed Monday night over the cause and cure for the nation's debt crisis. The two men spoke as Congress remained gridlocked on legislation to avert a threatened default after Aug. 2.

Decrying a "partisan three-ring circus" in the nation's capital, Obama assailed a newly minted Republican plan to raise the nation's debt limit as an invitation to another crisis in six months' time. He said congressional leaders must produce a compromise that can reach his desk before the deadline.

"The American people may have voted for divided government, but they didn't vote for a dysfunctional government," the president said in a hastily arranged prime-time speech. He appealed to the public to contact lawmakers and demand "a balanced approach" to reducing federal deficits — including tax increases for the wealthy as well as spending cuts.

Responding moments later from a room near the House chamber, Boehner said the "'crisis atmosphere" was of the president's making.

"The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today. That is just not going to happen," the speaker said. "The president has often said we need a 'balanced' approach, which in Washington means we spend more, you pay more."

Obama stepped to the microphones in the East Room of the White House a few hours after Republican lawmakers, then his own Democrats, drafted rival emergency legislation to head off a potentially devastating default.

The back-to-back speeches did little to suggest that a compromise was in the offing, and the next steps appeared to be votes in the House and Senate on the rival plans by mid-week.

Despite warnings to the contrary, U.S. financial markets have appeared to take the political maneuvering in stride — so far. Wall Street posted losses Monday but with no indication of panic among investors.

Without signed legislation by day's end on Aug. 2, the Treasury will be unable to pay all its bills, possibly triggering an unprecedented default that officials warn could badly harm a national economy still struggling to recover from the worst recession in decades.

Obama wants legislation that will raise the nation's debt limit by at least $2.4 trillion in one vote, enough to avoid a recurrence of the acrimonious current struggle until after the 2012 elections.

Republicans want a two-step process that would require a second vote in the midst of the 2012 campaign with control of the White House and both houses of Congress at stake.

Monday night's speeches were a remarkable turn in a six-month-old era of divided government as first the president, then his principal Republican opponents appealed to the nation in a politically defining struggle.

Obama quoted Ronald Reagan — a hero to many conservatives — who also spoke of a balanced plan and stressed a need for compromise. Obama stopped well short of threatening a veto of the GOP-drafted legislation that he criticized.

Boehner's remarks seemed aimed at the general public and also at conservatives — tea party advocates included — who installed the Republicans in power in the House last fall.

There were concessions from both sides embedded in Monday's competing legislation, but they were largely obscured by the partisan rhetoric of the day.

With their revised plan, House Republicans backed off an earlier insistence on $6 trillion in spending cuts to raise the debt limit.

And while the president didn't say so, his embrace of legislation unveiled by Senate Majority Leader Harry Reid effectively jettisoned his longstanding call for increased government revenues as part of any deficit reduction plan.