Updated: 3:02 p.m.
White House officials said Sunday that while the situation is still in flux, both parties and the president are busy working out a framework for a debt ceiling deal that will avert default.
“We don’t have a deal. The hours are ticking here,” senior White House adviser David Plouffe said on NBC’s “Meet the Press.” “Today is obviously a critical day. We have to give confidence that there’s a pathway.”
The compromise taking shape would raise the debt ceiling by about 2.4 trillion, which would cover the country through the 2012 elections. It would include immediate spending cuts of about $1.2 trillion followed by a second deficit reduction phase, in which an appointed committee of lawmakers would look for about $1.8 trillion in additional deficit reduction.
National Economic Council Director Gene Sperling outlined the three principles that President Barack Obama needs to see in a successful deficit reduction package.
“One, that we have a significant down payment on deficit reduction, and as part of his willingness to compromise he is fine with that being just spending cuts that are mutually acceptable,” he told CNN’s “State of the Union.” “Then, second, we come back for a more significant effort at deficit reduction that would include entitlement reform and tax reform that raises revenues. And three, that whatever agreement we have, it has to lift the cloud of uncertainty off our economy ... not just by the threat of default now, but the idea that we would just kick that threat down the road and go through this whole mess again around the holidays.”
The second effort at debt reduction would be undertaken by a bipartisan group of lawmakers selected by their party based on their ability to build consensus, officials said. They would examine further spending cuts, reforms to entitlement programs and changes to the tax code as ways to further reduce the country’s deficit. There would be a way to apply pressure — though at this point the details are not clear — to make sure the group reaches an agreement.
“You want to make it hard for them to just walk away and wash their hands. ... Both sides have to essentially fear that enforcement mechanism enough that they’re willing to come to the table and compromise on an agreement,” Sperling told CNN.
“We should have an action-forcing event. We should have something that forces all us to get our work done. That enforcement mechanism should not be threatening the default of United States of America,” Sperling said in another appearance on “Fox News Sunday.”
Sperling and Plouffe declined to give the details of any contingency plan if Congress does not reach an agreement by Tuesday, when the Treasury Department predicts that the nation will exceed its borrowing authority and will default on its debts. The two said the focus should remain on finding a solution, not figuring out which debts would go unpaid.
It would be “inconceivable” to not resolve this before Tuesday, Plouffe said on ABC’s “This Week.”
“We don’t have much time left — a little over 60 hours,” he said. “There is no off-ramp here. The only option is for Congress to raise the debt ceiling and to sign these initial deficit reduction savings into law.”