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Entries in Countdown to Crisis (1)

Sunday
Jul312011

Republicans and White House Fully Engaged as the Clock Winds Down

ABC News(WASHINGTON) -- With just two days left before Uncle Sam’s credit card maxes out, there were a few signs Saturday afternoon that Republicans and Democrats may be closer to ending the standoff over the nation’s debt ceiling.  The Republican leader in the Senate, Mitch McConnell, expressed confidence that a deal could get done before Tuesday’s deadline.

“I've spoken to both the president and the vice president within the last hour. We're are now fully engaged,” said McConnell.  “I'm confident and optimistic that we're going to get an agreement in the very near future and resolve this crisis.”

House Speaker John Boehner signaled that he too thinks a deal can get done.  “In spite of our differences, I think we're dealing with reasonable, responsible people who want this crisis to end as quickly as possible, and I think we will,” he said.  

President Obama spoke with Boehner Friday night, the same evening that the House passed a $900 billion debt reduction bill that Boehner proposed.

Once the Boehner-backed bill got the Senate, Democrats moved to quickly to kill the bill, so that Senate Majority Leader Harry Reid could introduce his own plan to raise the debt ceiling.

Before the Senate could vote on the Reid bill, the House of Representatives voted Saturday to defeat the substance contained in Senate Majority Leader Harry Reid' s plan.

Before the vote, the Obama administration said it hoped the Reid plan would pass. In a statement, the Obama administration said, "If the bill were presented to the president, his senior advisors would recommend that he sign it."

The Reid plan contains about $2.4 trillion in cuts and would raise the debt ceiling until 2013. Republicans have said one of their main issues with the legislation is that Reid is counting on saving $1 trillion by winding down the Iraq and Afghanistan wars. Republicans describe Reid's math as an "accounting gimmick.”

The Boehner and Reid bills have some similarities.  They both contain budgets cuts greater than the debt ceiling increase amount and both would create a congressional committee to recommend more cuts within a year.

The political brinksmanship comes as the economy sends up distress signals.  The Dow Jones has been down for six days straight, taking with it $183 billion in American’s retirement accounts and new figures show the economy grew a feeble 1.3 percent in the quarter ending  June 30.  

After meeting with President Obama at the White House, Sen. Reid seemed a little frustrated with where the process is.   “The question is: are we closer to an agreement. The answer is no.”

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ABC News Radio