WASHINGTON — White House and congressional negotiators on Sunday were getting close to a $3 trillion, last-minute deal to break the deadlock over raising the nation's debt ceiling.
"We're very close," Senate Republican Leader Mitch McConnell of Kentucky said on CNN's "State of the Union." "I can pretty confidently say this debt ceiling increase will avoid default."
The $14.3 trillion debt limit must be increased by Tuesday. If it isn't, it puts the federal government at risk of default, which could trigger panic in financial markets worldwide and perhaps plunge the U.S. economy back into recession.
The deal being seriously discussed would raise the debt limit in two stages. The first could include a provision to cut deficits by about $1 trillion over 10 years, and create a special congressional committee to recommend further savings.
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These provisions, described by White House senior adviser David Plouffe on ABC’s "This Week," appear similar to those proposed in plans offered in recent days by Senate Majority Leader Harry Reid of Nevada and House Speaker John Boehner of Ohio in recent days.
McConnell said "what we’re looking at is a $3 trillion package" of deficit reduction, a vote on a balanced budget amendment to the Constitution and the powerful new joint congressional committee to recommend future savings — which would be considered by Congress — by late fall.
The multi-stage debt limit increase represents a concession by Democrats. They had sought one vote on raising the $14.3 trillion limit, which likely would have meant no more such votes until after the 2012 presidential election — and deprived Republicans of another round of showdowns over the volatile issue.
One the major roadblocks to an agreement has been what Plouffe Sunday called an "enforcement mechanism," or some way of assuring future deficit reduction. He said that remained "one of the areas that's still under discussion."
Several options for deficit reduction have been discussed. Republicans have suggested that unless certain savings are achieved, parts of the 2010 health care overhaul could be scuttled. Democrats have suggested that if such savings were not met, the Bush-era tax cuts, now scheduled to expire at the end of next year, would be allowed to do so.
Neither Plouffe, nor anyone else, would publicly say what options were being discussed. McConnell said, "We're still working on the parameters of it."
Negotiators hope to have at least a framework of an agreement by 1 p.m., when the Senate is scheduled to vote on cutting off extended debate on a plan proposed by Reid, which would raise the limit in three stages and cut $750 billion from spending.
Until late Saturday, Congress had remained deadlocked over the debt crisis as both houses spent the day publicly mired in often tart, even defiant partisan votes and rhetoric.
Privately, however, the White House was talking to leaders of both parties, and by Saturday evening the talks had made enough progress that Reid abruptly postponed a vote on his measure until Sunday.