WASHINGTON (Reuters) - With the debt limit of $14.3 trillion set to be reached on Monday, pressure mounts on President Barack Obama and Congress to figure how to raise it.
Democratic and Republican leaders agree failure is not an option, but both sides are still far from a deal.
The Treasury will take extraordinary measures to pay bills until August 2. After that date, it risks a federal government default that would rattle global financial markets.
Here’s a look at some of the key figures in this high-stakes showdown, including members of Vice President Joe Biden’s seven-member cross-party debt-reduction panel and the bipartisan “Gang of Six” senators who are also trying to reach a deal on slashing the United States’ long-term deficits.
Boehner, the top Republican in Congress, says spending cuts must exceed the amount of new borrowing authority, which could be $2 trillion.
“It’s true allowing America to default would be irresponsible,” he said in a speech in New York last week. “But it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process.”
A simple House majority would be needed to pass a debt-limit hike. Republicans control the House. But Boehner may be forced to strike a deal with Democrats if too many Tea Party Republicans reject his plan as not cutting deeply enough.
Reid has said he is drawing “no lines in the sand” in his efforts to increase the debt limit, though he says the Social Security retirement program should not be part of the discussion. He favors a broad framework that would require Congress to meet deficit-reducing targets each year.
That would provide time to resolve differences on how to meet those targets. In that scenario, automatic spending cuts or tax hikes would be triggered if the targets were not met.
Like fellow Republicans and a number of Democrats, McConnell says he won’t support an increase in the debt limit unless it is accompanied by significant cuts in spending.
After a White House meeting last week, McConnell preached the need for a sweeping bipartisan compromise.
“We can do something important for the country together, and this is the opportunity,” McConnell said. “It is the one time when we have to come together, and we need to come together to do something really significant.”
Conrad, chairman of the Senate Budget Committee, recently floated a plan that would rely equally on tax increases and spending cuts to save $4 trillion over 10 years.
It would represent a dramatic shift from the previous ratio of $3 in spending cuts to $1 of tax hikes backed by the White House. Conrad is a member of the “Gang of Six.”
One of four senators in the Senate Tea Party Caucus, DeMint promises to raise a procedural hurdle against a debt-limit hike. To clear this hurdle, supporters of raising the debt ceiling would need at least 60 votes in the 100-member Senate.
The only way 60 votes could be mustered would be with the help of at least seven Republicans. Democrats control the chamber, 53 to 47.
While it is unclear who the seven may be, don’t expect any of the Senate’s three other Tea Partiers — Rand Paul, Mike Lee and Jerry Moran — to be among them.
Baucus is one of four Democrats in Biden’s group.
As chairman of the tax-writing Senate Finance Committee, he has voiced support for a tax-code simplification that would close loopholes and tax breaks that now total roughly $1 trillion per year, enabling lower rates without a loss of revenue.
Baucus sat on a presidential deficit-reduction commission last year but voted against its final plan on the grounds that his rural state of Montana would be hurt by the higher gas taxes, reduced farm subsidies, and limits on health and retirement benefits that the plan recommended.
Founder and chairwoman of the 59-member House Tea Party Caucus, Bachmann opposes an increase in the debt limit — unless it includes repealing Obama’s overhaul of U.S. healthcare, a non-starter for the White House.
“It’s time to reject the debt ceiling scare tactics and address the truly frightening reality that our debt is at $14 trillion and growing,” Bachmann, a possible 2012 Republican presidential contender, told fellow Tea Partiers last week.
Cantor and Assistant Senate Minority Leader Jon Kyl are the two Republicans on Biden’s deficit-reduction group.
Cantor has said that any agreement to raise the debt ceiling must include short-term spending cuts that would likely be coupled with an automatic trigger on long-term reduction in expenditures.
Cantor is regarded as more partisan and less inclined toward deal-making than Boehner. Like Boehner and other Republicans, he vows to oppose any tax hikes.
As his party’s chief vote counter in the Senate, Kyl is tasked with maintaining discipline in a caucus that is less conservative than its Republican counterpart in the House.
Manchin is in the same political boat as many of his fellow Senate Democrats.
Facing a tough 2012 reelection campaign and polls showing Democrats split on whether the debt ceiling should be lifted, Manchin has threatened to defy the White House and oppose an increase unless it is accompanied by a budget plan that begins to “fix this nation’s financial mess.”
“I challenge Republicans and Democrats to stand up and confront the fiscal problems we face,” Manchin said, echoing the sentiment of members of both parties.
Reporting by Thomas Ferraro and Andy Sullivan; editing by David Lawder