* Uncertainty over debt talks not affecting bond markets
* Top Republicans saw Hoyer deadline not realistic
* Biden group laying groundwork for Obama, Boehner deal
WASHINGTON, May 23 Political leaders in
Washington should wrap up talks to increase the United States'
borrowing authority by June 8 to avoid spooking financial
markets, a top congressional Democrat said on Monday.
Steny Hoyer, the No. 2 Democrat in the House of
Representatives, said negotiators should avoid the brinkmanship
that has marked other budget disputes this year as they try to
forge a deal that would give lawmakers political cover to back
an increase in the $14.3 trillion U.S. debt limit.
"If we're going to have to do it, my view is doing it
sooner rather than later roils the markets less," Hoyer said in
a speech at the Bipartisan Policy Center, a think tank.
The Treasury Department has warned that the United States
could risk default if it does not increase the debt limit by
Aug. 2, but Republicans and some Democrats say they won't back
an increase without a deficit-reduction deal that will keep the
national debt at a sustainable level.
The debate has so far not had an impact in bond markets as
investors continue to view U.S. debt as a safe haven.
Many Washington observers expect that Vice President Joe
Biden and other negotiators in White House-led talks will work
right up to that deadline. Some Republicans have suggested that
markets would not necessarily be upset if they blow past it.
One participant in the Biden talks said Hoyer's proposed
deadline was unrealistic.
"I think June 8 would be pressing it," Republican Senator
Jon Kyl told reporters. "Knowing where we are in our
conversation with Vice President Biden, I don't think it'd be
very easy to get there."
Another Republican negotiator suggested that Biden's group
was only laying the groundwork for final talks between
President Barack Obama, House Speaker John Boehner, the top
Republican in Congress, and Senate leaders.
"Ultimately decisions are going to be made between the
Speaker, the President and those in the Senate," said
Representative Eric Cantor, the No. 2 House Republican. "We are
engaging in these discussions right now in the Biden commission
to really understand where both sides are."
The Biden group, which includes four Democratic lawmakers
along with Cantor and Kyl, is due to meet on Capitol Hill on
The group has so far agreed on roughly $150 billion in
proposed spending cuts -- far short of the trillions of dollars
in savings that Boehner has said will be necessary to win
Republican support for raising the debt limit.
(Reporting by Richard Cowan and Andy Sullivan; Editing by