Obama would OK stopgap measure if bigger debt deal is near

WASHINGTON (AP) - 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 on 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.

The president, pushing for a big compromise that would cut the nation's budget deficit and extend the government's tapped-out borrowing power, had threatened to veto any stopgap expansion of the nation's debt limit. He even challenged House Majority Leader Eric Cantor not to call his bluff about it in one confrontational moment last week.

Obama's now-calibrated position, offered by spokesman Jay Carney, reflected the reality: that 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 and other payments, send interest rates higher and erode the creditworthiness of the richest nation on earth.

At the White House, Obama met privately with the Democratic leaders of the House and Senate, and then separately with House Speaker John Boehner and Cantor. All signs pointed to a legislative battle that would play out until the last minute.

The latest talks centered on a single but complex question: What will it take to muster enough votes from both parties to muscle legislation through the House and Senate and raise the national debt limit by the deadline. Congressional leaders say they want to prevent default, but they are far from agreed on how.

The divided-by-party nature of Obama's negotiations underscored his need to get a bottom line from Democrats in both chambers and the leaders of the Republican-run House.

His challenge with fellow Democrats is to persuade them to accept changes to the popular entitlement programs of Medicare and Social Security. With Republicans, Obama is slamming into opposition from conservatives who refuse to consider tax increases. Obama wants a mixed approach of higher taxes on the wealthy and spending cuts that share the pain.

"There is still time to do something significant," Carney said, urging compromise.

Realistically, though, the deadline for agreement is this week, not next week, given the time needed to craft, debate, pass and work out possible differences in legislation.

Senate Majority Leader Harry Reid of Nevada said Tuesday that the head of the Congressional Budget Office has told him it could take the scorekeeping agency two weeks to come up with an official cost estimate for even a relatively modest package of spending cuts.

Then there are the problems of moving the debt limit increase through the Senate, where the rules allow any single member to force delays.

Parliamentary experts say that if the Senate takes up the debt limit measure this Saturday, it could take more than a week, until Monday, Aug. 1, to pass the measure through the Senate, give the House time to consider it and make changes and then gain Senate approval one more time.

The Obama administration and Congress are also working on a backup plan to increase the debt limit if no big plan can be reached. It would allow Obama to raise the ceiling on his own unless overridden by Congress. Yet many House Republicans loathe that idea and have pledged to vote against it, raising doubts about how tenable even the fallback choice is.

That plan is the result of work by the Democratic and Republican leaders of the Senate, Reid of Nevada and Mitch McConnell of Kentucky.

Obama is trying to seize on momentum from a proposal from a bipartisan "Gang of Six" senators that would cut the deficit by almost $4 trillion but lacks many specifics.