Boehner, Reid preparing to move on debt limit

WASHINGTON (AP) — Democratic and Republican congressional leaders shopped competing debt-crisis solutions and President Barack Obama canceled fundraising appearances Monday, as a politically gridlocked capital lurched into a climactic last full week before the Aug. 2 default deadline.

Even amid acknowledgments by U.S. leaders of the need to reassure jittery investors, world markets fell and both the Dow Jones and Standard & Poor’s 500 opened down at Wall Street’s opening bell with the Aug. 2 deadline to raise the government’s borrowing limit fast approaching.

Efforts to break the impasse intensified Monday as Republican Speaker John Boehner and Senate Democratic Leader Harry Reid planned to lobby their deficit reduction plans with their respective House and Senate caucuses after the Obama White House and Congress made little apparent headway in private talks over a long, steamy weekend.

Boehner was set to meet with his chamber’s Republicans to discuss the GOP’s clash with Obama over extending the government’s borrowing authority. The Ohio Republican planned to unveil a new debt ceiling plan at the GOP meeting and post it online later in the day, a spokesman said.

Aides said Boehner’s plan was a two-step process, with an immediate $1.2 trillion in cuts and spending caps coupled with a $900 billion debt ceiling increase, followed by creation of a congressional committee charged with producing nearly $2 trillion in additional cuts. The debt ceiling needs to be increased by about $2.4 trillion to last until 2013, the time frame that Obama and Democrats are insisting on, but which would not be immediately permitted under Boehner’s plan.

Instead Boehner’s plan would condition the full debt ceiling increase until 2013 on congressional approval of his proposal. Boehner’s plan also requires both the House and the Senate to vote on a balanced budget amendment, a goal of conservatives. But the increase in the debt limit is not directly tied to the balanced budget amendment issue.

Reid called Boehner’s proposal “a nonstarter in the Senate and with the president” because it would permit only a short-term increase of the sort that has already been rejected by Democrats. Boehner’s office rejected that description.