Updated: 9:27 p.m.
The two parties' leaders remained deadlocked Saturday night on the debt limit, with a two-tier proposal from Republicans failing to win Democratic backing and no clear path to averting the nation's first ever debt default.
Democrats repeatedly said Saturday that they would not accept anything that does not guarantee a debt limit hike through 2012 — and an offer from Republicans fell short of that.
"Anything less than that will fail to provide the certainty that the markets — and the world — are looking for, risking an immediate downgrade of America's credit rating," said a "deeply disappointed" Senate Majority Leader Harry Reid in a statement late Saturday. "This would force a tax increase on all Americans and drain their savings funds and retirement plans as well."
The Nevada Democrat continued, "I hope that Speaker [John] Boehner and [Minority] Leader [Mitch] McConnell will reconsider their intransigence. Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States."
The top four party leaders met for about an hour late Saturday. House Minority Leader Nancy Pelosi (D-Calif.) and Reid huddled in her office afterward. She told reporters as she left the Capitol Saturday that revenues "have to be" part of a deficit reduction deal.
Under the two-tier approach floated by Republicans, an initial package of cuts and a small debt limit hike would be accompanied by the creation of a joint deficit reduction committee. A second debt limit hike would be contingent on enacting additional deficit reduction.
Boehner spokesman Michael Steel said late Saturday that "a two-step process is inveitable" because Democrats have not accepted Republican proposals for reducing the deficit and have not offered any of their own.
Pelosi confirmed that leaders are looking at a two-tier increase in the debt ceiling, and said revenue increases would have to be part of the second tier to achieve the deficit reduction needed.
She later issued a statement blaming the impasse on the GOP.
"The delay in bringing forth a solution springs from the Republicans' decision to walk away from 98 percent of the American people to protect the assets of the top 2 percent of the wealthiest people in our country," she said. "We will not make working families and the middle class sacrifice without also calling on everyone to contribute their fair share."
Pelosi also said, "Democrats remain committed to a solution that is long term, balanced and bipartisan; to do anything less would be irresponsible.
She said there are no further meetings scheduled yet. Asked if President Barack Obama was still being kept informed and involved, Pelosi insisted he was at the "center" of everything discussed.
A senior Democratic aide, meanwhile, said Republicans rejected an offer made by Democrats to implement the two-tier approach with the first round of debt ceiling increase sufficient to carry through 2012.
A Democratic aide said that without a debt limit hike through 2012, they'd all be back in a few month facing the same default scenario.
"We are not a banana republic," the aide said. "You don't run America like that."