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Obama threatens veto of short-term fix

WASHINGTON, July 24 (UPI) -- President Barack Obama will veto any plan that fails to raise the U.S. debt ceiling through 2013, his chief of staff, William Daley, said Sunday.

Meanwhile, Republicans and Democrats failed to reach agreement by Sunday afternoon. Even worse, congressional leaders appeared to moving independently on their own to come up with competing plans to handle the debt and raise the debt ceiling, without only eight days until the United States defaults, Politico reported.

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Senate Majority Leader Harry Reid, D-Nev., began to draft his own legislation to cut at least $2.5 trillion to match an extension of the debt limit through the 2012 election, aides said.

Reid and House Minority Leader Nancy Pelosi got together with President Barack Obama Sunday evening. Afterward, a White House official said only that Obama "received an update on the state of negotiations on the Hill from Leader Pelosi and Leader Reid, and the leaders and the president reiterated our opposition to a short-term debt limit increase."

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House Speaker John Boehner, R-Ohio, told his fellow GOP leaders in a conference call that a debt deal with Obama is not the way to go, Politico reported. He said a plan that "reflects the principles" of the conservative "Cut, Cap and Balance" plan the Senate already has rejected -- and Obama has promised to veto as well should it ever reach his desk -- should be the basis for any legislation coming out of the House.

Speaking earlier on NBC's "Meet the Press," Daley said: "The president believes that we must get this uncertainty ... out of the system."

The debt ceiling, he said, "must be extended in a way that gives certainty to the economy through '13, not some short-term gimmick where … the world looks at us once again and says … 'These people just can't get their act together.'"

Republicans have proposed a short-term lifting of the debt ceiling -- with $1 trillion in spending cuts -- through the end of 2011, with a bipartisan committee to find $3 trillion more in savings before Congress would vote on raising the debt limit again before the 2012 election.

Sen. Tom Coburn, R-Okla., a member of the the so-called Gang of Six senators, called Daley's veto threat "a ridiculous position."

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A two-part deal is what Obama's "going to get presented with," he said on "Meet the Press."

On "Fox News Sunday," Boehner said: "There is going to be a two-stage process. It's not physically possible to do all of this in one step."

"I am going to continue to develop a framework within the principles of cut, cap and balance," which the House passed and the Senate rejected last week, Boehner said.

"There was never any plan from the White House," he said. "The whole plan came from us. We laid out the framework. And at some point they have got to lay their cards on the table."

On ABC's "This Week," Treasury Secretary Timothy Geithner said: "Both leaders recognize they're running out of time. They need get this process moving in the House by Monday night to achieve that deadline. They need to have a framework that they know with complete confidence will pass both houses of Congress, that is acceptable to the president, and that should happen today."

Washington is under pressure to show some sign of progress before Asian financial markets open for Monday trading -- Sunday afternoon U.S. time.

"We can't adopt an approach that leaves the threat of default hanging over the country for another six months," Geithner said, referring to the two-stage plan.

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He refused to say which obligations the federal government would honor in the event of a default, insisting it will not happen.

Raising the ceiling is "the only option available. We do not have the ability to limit the damage," he said.

On CNN's "State of the Union," Geithner said: "We're a AAA country. Congress is just going to prove that they have the ability now to get this done in the short time frame remaining. And I think that forces of reason are getting stronger now."

Daley denied charges by Boehner and other Republicans that Obama "moved the goalposts" by insisting on another 400 billion in tax increases on top of $800 million already agreed to. He also said Obama and Boehner had no such deal, though Geithner said they were close to one before talks broke off Friday.

Sen. John Kyl, R-Ariz., said on CBS' "Face the Nation": "Since 1972, Congress has raised the debt ceiling for six months or less 38 times. So we can surely extend it for five or six months.

"... The problem, I think, is that the single most important thing to President Obama is extending this beyond his re-election campaign. He just doesn't want to have to deal with it again."

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Sen. Dick Durbin, D-Ill., the majority whip, said credit rating agencies have said "a short-term extension of the debt ceiling is going to jeopardize our economy. ... And Speaker Boehner is ignoring that warning."

"This notion that we're going to replay this movie in four or five months, that we're going to face this whole thing all over again -- the American economy is too fragile at this point in recovery for us to allow that to happen," Durbin said.

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