Obama softens his stand on debt deal

Associated Press

WASHINGTON

Running out of time, President Barack Obama softened his stand and signaled Wednesday he would back a short-term deal to prevent a disastrous financial default Aug. 2, but only if a larger and still elusive deficit-cutting agreement was essentially in place. He called lawmakers to the White House in a scramble to find enough votes from both Republicans and his own party.

Obama met with the Democratic leaders of the House and Senate, and then separately with House Speaker John Boehner and his deputy, Majority Leader Eric Cantor, in hopes of cobbling together a big compromise.

All signs pointed to a legislative fight that would play out to the end.

The president, pushing for a deal that would cut the nation’s budget deficit across the next decade and extend the government’s tapped-out borrowing power through the approaching election year, had threatened to veto any stopgap expansion of the nation’s debt limit.

Obama’s now-calibrated position, offered by spokesman Jay Carney, reflected the reality: Leaders are nearly out of time to head off unprecedented trouble. Carney said if a divided Congress and the White House can agree on a significant deal, Obama would accept a “very short-term extension” of the debt limit to let bigger legislation work its way through Congress.

Even a few days matters, given the stakes.

The government will exhaust its ability to borrow money and pay its bills come Aug. 2, an outcome that could sink the country back into recession, halt Social Security checks, send interest rates higher and erode the creditworthiness of the richest nation on earth.