Executive Branch Late Attempt At Debt-Limit Deal To Avert Default

Washington – The White House and Republican congressional leaders made significant progress toward a deal to avert a potentially catastrophic first-ever government default threatened for early next week, according to officials familiar with the talks.

Under a plan negotiated late Saturday night, the nation's debt limit would rise in two steps by about $2.4 trillion and spending would be cut by a slightly larger amount, the officials said. The first stage -- about $1 trillion -- would take place immediately and the second later in the year.

Congress would be required to vote on a balanced budget amendment to the Constitution, but none of the debt limit increase would be contingent on its approval. The officials who described the talks did so on condition of anonymity, citing their sensitive nature.

President Barack Obama is seeking legislation to raise the government's $14.3 trillion debt limit by enough to tide the Treasury over until after the 2012 elections. He has threatened to veto any legislation that would allow a recurrence of the current crisis next year but has agreed to Republican demands that deficits be cut -- without tax increases -- in exchange for additional U.S. borrowing authority.

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