SNAPSHOT-Developments in U.S. debt talks

WASHINGTON, July 22 Fri Jul 22, 2011 7:06pm EDT

WASHINGTON, July 22 (Reuters) - Here is what's happening on Friday in negotiations to raise the U.S. government's $14.3 trillion debt limit by Aug. 2 and avoid a credit default:

* U.S. House Speaker John Boehner walks away from talks with President Barack Obama on a deficit reduction deal that was to clear the way for an increase in the debt limit. Boehner says Obama wanted to raise taxes. Boehner says he will now begin talks with U.S. Senate leaders.

* U.S. Senate Democratic Leader Harry Reid says U.S. default must be averted "at all costs." Says bipartisan talks should focus on an agreement that at least accomplishes that goal. But he also says he wants a long-term plan enacted.

* Obama says it "hard to understand" why Boehner would walk away from what he called an "extraordinarily fair" deal. Obama says deal would have cut $1 trillion in discretionary spending and $650 billion from Medicare, Medicaid and other entitlements. Deal would have sought $1.2 trillion in revenues, which could have been achieved with raising income tax rates.

* Obama says he wants Boehner, Reid, Senate Republican Leader Mitch McConnell and House Democratic Leader Nancy Pelosi at a White House meeting on Saturday.

* Senior Democrats say they were frustrated at being left out of closed-door negotiations between Obama and Boehner. They were worried a deal would include big spending cuts and leave revenues to be worked out later.

* Treasury Secretary Timothy Geithner meets with Federal Reserve Chairman Ben Bernanke and New York Fed President William Dudley to talk about the implications for the U.S. economy if Congress failed to raise the debt.

* Lawmakers need to have a deal in place by Monday in order to ensure it can pass by Aug. 2, a senior Republican aide says. (Reporting by Donna Smith and Andy Sullivan)

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