The White House encouraged congressional leaders to reach a major deficit-reduction deal by offering them a little more time, as they scrambled to find a way to prevent a government default in less than two weeks.
President Barack Obama would accept a short-term increase in the federal government's $14.29 trillion borrowing limit if congressional leaders reach agreement on a "significant" deficit-reduction plan before Aug. 2 but need more time to pass legislation, a White House spokesman said Wednesday.
The move reflects Mr. Obama's desire to keep alive hopes that Democrats and Republicans can achieve a far-reaching agreement. Mr. Obama has made clear his desire for the largest deal possible, perhaps along the lines of a new proposal to shrink the deficit by $3.7 trillion over 10 years that was unveiled this week by a bipartisan group of senators known as the "Gang of Six."
Mr. Obama's willingness to entertain a short-term extension also suggests rising doubt in the White House that Democrats and Republicans can agree on and pass such a sweeping deficit-reduction plan by the Aug. 2 deadline.
"If both sides agree to something concretely significant, we will support the measures needed to finalize the details," White House press secretary Jay Carney said, later clarifying that he meant a "very" short-term extension, such as a few days.
"We believe a short-term extension, absent an agreement to a larger deal, is unacceptable," Mr. Carney said.
Mr. Carney's comments come as numerous budget proposals are being debated in Washington, all of which have critics. Treasury Department officials say that Congress must boost the $14.29 trillion debt ceiling before Aug. 2, or the government will run out of cash to pay its bills. Many lawmakers say they will not vote to increase the debt cap without a significant deficit-reduction plan.
It was unclear Wednesday exactly what type of agreement would be needed to get Mr. Obama's blessing on a temporary extension. If lawmakers can't reach a deal in the range of $4 trillion, Mr. Obama has said he prefers one closer to $2.5 trillion. He summoned Democratic congressional leaders and the top two House Republicans to the White House Wednesday for separate meetings, but they broke up without any signs of major progress. The White House and leaders declined to discuss the sessions.
Senate Majority Leader Harry Reid (D., Nev.) and House Speaker John Boehner (R., Ohio) have both said there may not be enough time for lawmakers to agree on and pass a major deal by Aug. 2. At the same time, the president has said he and congressional leaders must prepare a backup plan to ensure the government does not default on its obligations.
One measure being pursued by Mr. Reid and Senate Minority Leader Mitch McConnell (R., Ky.) would give the president the authority to raise the debt ceiling by $2.5 trillion in three installments, unless two-thirds of Congress votes to block it. House Republicans came out strongly against the McConnell-Reid idea, saying it gives too much power to the president and does too little to cut spending. Some senators have also said they won't support it.
Sen. Jim DeMint (R., S.C.), who is joined by other conservative senators, made it clear he would try to block or delay consideration of Plan B in the Senate. "What Republicans need to acknowledge is that as long as we talk about these alternative plans, we are playing into the president's hands," said Mr. DeMint. "My job with the Republican conference is to get them to stop talking about distractions."
Still, Senate leaders of both parties view the McConnell-Reid approach as the only plan, for now at least, that has a chance of passing Congress in some form and raising the debt limit. The plan could include $1 trillion or more in spending cuts and could become the vehicle for a broader plan. Mr. Obama has described the McConnell-Reid plan as a last resort.
Senate Budget Committee Chairman Kent Conrad (D.N.D.), a member of the Gang of Six, said he had discussed with Mr. Reid options for advancing the group's proposal through Plan B, which calls for setting up a special committee to recommend a deficit-reduction plan. Mr. Conrad suggested Plan B could include a provision guaranteeing a vote on the Gang of Six proposal if the special committee deadlocks.