Amid growing anger, debt limit debate drags on

The date at which the Obama administration and most economists say the United States - and the world - faces economic catastrophe without a deal to raise the debt ceiling is less than three weeks away. Lawmakers are still far apart on a deal, with a contentious meeting yesterday ending with President Obama abruptly walking out.

So how did the top leaders in Washington spend much of their day Thursday? By lobbing insults at each other and holding public events seemingly grounded in considerations more political than practical.

Lawmakers will meet again late Thursday afternoon to try to hammer out a deal to increase the nation's $14.3 debt ceiling - the limit, set by Congress, on how much money the United States can borrow. Republicans, who control the House of Representatives, have said they will only vote to increase the debt limit in exchange for a deficit-reduction package larger than the amount of the increase. Democrats are in favor of such a package, but there is a major point of contention between the parties: Republicans want the package to include only spending cuts, while Democrats say it must also include revenue increases as well. And boxed in by their base, neither side has been willing to budge.

If the debt ceiling is not increased by August 2, the administration says, the United States will no longer to be able to pay its obligations, potentially resulting in default to creditors, the suspension of Social Security checks and other benefits, an increase in interest rates and a host of other extremely serious and negative economic consequences. Administration officials have suggested a deal must be in place by roughly July 22 in order to get a deal through Congress in time. On Wednesday, ratings agency Moody's put the United States' Aaa bond rating under review for possible downgrade as the deadline approaches; Thursday, Treasury Secretary Timothy Geithner said bluntly, "we're running out of time."  (You can read a primer on the debt limit fight here.)

It's not entirely clear what took place in Wednesday's two hour, closed-door meeting, with both Republicans and Democrats trying to spin it to make their side look good. But there is little doubt that those involved showed signs of frustration. After House Majority Leader Eric Cantor pressed the president to consider a short-term debt limit extension - something the president has ruled out - Mr. Obama left the meeting, saying "enough is enough."

Sources say Mr. Obama also told Cantor not to try to "call my bluff," while a GOP aide said House Speaker John Boehner pointedly said in response to an effort to use budgetary gimmicks to reach a deal, "We're not doing that anymore."

Despite that, Boehner has emerged during the debate as the Republican leader most willing to compromise, working with Mr. Obama on a "grand bargain" deal to reduce the deficit by $4 trillion over a decade. (That attempt fell apart last weekend, though the White House is still pushing for it; the goal has now been pushed back to a less ambitions $2 trillion deal.) Cantor, by contrast, has been cast as a hard-liner unwilling to give an inch, making him the emerging hero of Tea Party-backed freshmen and prompting chatter of a split in the GOP leadership.

Democrats spent the day casting Cantor as a petulant crybaby, with Senate Majority Leader Harry Reid calling him "childish" and saying Cantor "has shown he shouldn't even be at the table." Sen. Charles Schumer, meanwhile, disputed Cantor's claim that there is no deficit reduction deal that can pass the House and suggested that Cantor is "the only real person who has not made any concessions."

"He is basically standing in the way, and it's a shame," Schumer said.

Meanwhile, Boehner, Cantor and other Republicans held a press conference to push for a balanced budget amendment - something that virtually no one expects can be included in a debt limit deal, especially considering that it would require a two-thirds majority in both houses of Congress. Boehner defended Cantor against Democratic criticism, saying claims that "the role he has played in these meetings has been anything less than helpful is just wrong."

At the White House, Press Secretary Jay Carney played down expectations for Thursday's meeting, saying, "I do not expect today a hallelujah moment." He called suggestions that Mr. Obama had stormed out of Wednesday's meeting "preposterous," describing the meetings as "reasonably collegial and respectful."

All parties involved in the negotiations say there will be a deal to raise the debt ceiling one way or another, though no one seems quite sure how to get there. The idea seen as the most likely to result in a breakthrough is one involving a tax reform package acceptable to at least some hard liners on both sides; barring that, the White House has signaled openness to Senate Majority Leader Mitch McConnell's "back-up plan" to effectively hand responsibility for raising the debt ceiling over to Mr. Obama. McConnell said Thursday that when it comes to debt ceiling issues, the president should not "expect any more cover from Republicans on it than you got on health care. None." That effectively translates to a promise of zero support from the GOP, since no Republicans voted for the final version of the health care overhaul.

Meanwhile, cracks in the Republican coalition continued to show as a result of the deal, with Wall Street splitting with the Tea Party in calling for a deal to get done.

"No one can tell me with certainty that a U.S. default wouldn't cause catastrophe and wouldn't severely damage the U.S. or global economy," JP Morgan Chase CEO Jamie Dimon said Thursday. "And it would be irresponsible to take that chance."