No debt deal in sight after White House meeting

With no deal in sight for a resolution to the looming economic crisis, President Obama met with Congressional leaders in a brief session Saturday morning, a last-ditch effort to prevent default on the nation's debt.

It was business-casual at the White House, even as both parties looked to brainstorm stopgap solutions to prevent default. Vice President Joe Biden, House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and House Minority Leader Nancy Pelosi attended this morning's session. The meeting, requested by the president yesterday, began at 11:08 a.m and concluded at 11:58 a.m., a White House official said.

House and Senate leaders have said they are prepared to undertake the final push to reach a compromise before the August 2 deadline. Friday's breakdown of talks between Boehner and Obama created the immediate prospect of a faceoff between the House and Senate, with each pushing separate fallback plans. Both parties have said they will be working throughout the weekend in attempts to reach consensus.

"The President wanted to know that there was a plan for preventing national default," McConnell said in a statement. "The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending."

House Republican leaders planned to hold a conference call with rank-and-file members after Saturday's meeting.

Pelosi, after the meeting, said she "certainly would hope" that there could be a deal reached this weekend. But she outright rejected the possibility of any short-term agreement, saying that was "absolutely, positively not" going to happen.

"If we're going to do it by August 1, you've got to engineer back. We've got to make every moment count," she said.

Obama, at a White House press conference Friday night notable for his palpable frustration, ruled out any short-term debt limit increase. He said he wanted congressional leaders to present alternatives on Saturday, pressing for a proposal that lasts until 2013-after the presidential election.

Boehner's office on Saturday morning chided Obama for opposing any proposal that does not raise the $14.3 trillion plan by enough to resolve the issue until after the November 2012 election, accusing the president of playing politics. "We do not know what size or shape a final package will take, but it would be terribly unfortunate if the president was willing to veto a debt limit increase simply because its timing would not be ideal for his re-election campaign," a Boehner aide said.

The Boehner aide said the speaker would "reiterate again today that in order for a bill to pass the House, it must include cuts greater than the debt limit increase."

That argument could lay groundwork for the speaker to move forward with a bill that incorporates $1.5 trillion in spending cuts identified in talks led by Biden. That would require raising the debt ceiling again before March 2012. The measure could include two years of spending caps. It would be the first piece of a two-part process that Boehner proposed to Obama before their grand bargain talks collapsed. McConnell has encouraged House GOP leaders to consider this course.

But Obama and Reid, worried the House would try to pressure them into passing the bill just before the August 2 deadline with the suggestion the must accept it or risk default, have said they would reject it.

Reid could start floor action Monday by filing cloture on a joint proposal with McConnell to allow Obama to raise the debt ceiling by $2.5 trillion himself if, ultimately, more than two thirds of both chambers did not stop him.

That measure would also create a special bicameral congressional committee of 12 members that could recommend cuts that would receive expedited consideration and it could include a mechanism to give the deficit reduction plan from the so-called Gang of Six a vote. Reid has suggested the House could then add the same $1.5 trillion in cuts it is eyeing after Senate passage.

But Boehner aides on Friday called this option as good as dead, insisting talks with Reid were starting anew with a clean slate.

Of the potential paths ahead, the McConnell-Reid option has remained deeply unpopular for most House Republicans, and would likely require a good number of House Democrats to join fewer Republicans to pass the House.

But Boehner has stopped short of shutting the door. He said at a press conference July 14 that, "Mitch described his proposal as a last-ditch effort in case we're unable to do anything else… And what may look like something less than optimal today, if we're unable to get to an agreement, might look pretty good a couple of weeks from now."

Major Garrett contributed to this report.