Credit Rating Agencies Affirm U.S. AAA Status

UPDATE: Two of the three major credit rating agencies have affirmed the U.S. government's triple-A credit rating now that the months-long stalemate in Washington over raising the debt ceiling has come to an end.

Moody's Investors Service and Fitch Ratings signaled that the nation's top-notch rating was safe for now, although both warned of future downgrades if the government is unable to find additional ways to cut the deficit and if the sluggish economy continues. Moody's went as far as to mark the outlook as "negative."

The deal “is a positive step toward reducing the future path of the deficit and the debt levels,” Steven Hess, senior credit officer at Moody’s, told Bloomberg. “We do think more needs to be done to ensure a reduction in the debt to GDP ratio, for example, going forward.”

Standard and Poor’s, the third rating agency, has yet to weigh in.

UPDATE Tuesday at 2:09 p.m.: Stop the countdown clocks.

The White House announced this afternoon that President Obama has signed the debt deal that the Senate passed earlier in the day. The White House had said that a deal would need to be in place by midnight Tuesday in order to avoid the risk of a government default.

After months of negotiations, Washington got its act together with a whopping 10 hours to spare.

UPDATE Tuesday at 1:26 p.m.: President Obama addressed the debt ceiling negotiations this afternoon for what seemed liked the millionth time, calling the deal he is expected to sign later today "an important first step to ensure that the nation can live within our means."

The president said he will now refocus his efforts on creating "new jobs, higher wages and faster economic growth."

"We’ve got to do everything in our power to grow this economy and put this country back to work," he said.

UPDATE Tuesday at 12:40 p.m.: As promised, the Senate signed off on the House-passed debt deal Tuesday afternoon, passing the measure 74-26 and sending it to President Obama's desk for his signature.

Obama is scheduled to make a statement at the White House shortly.

UPDATE Tuesday at 10:03 a.m.: The Senate is expected to vote on the House-passed debt deal at noon today.

The usual suspects (Jim DeMint and Rand Paul) have indicated they have no plans to filibuster, so assuming everything goes according to plan, the bill should make it to President Obama's desk with plenty of time to spare before midnight.

But just because the work is almost done, doesn't mean politicians are ready to give up on what they do best: partisan bickering!

Conservative Republicans fired back Monday at Joe Biden, who reportedly told Democrats in a private meeting that the GOP's right flank was "acting like terrorists" during the debt negotiations.

Here were some of the Republican reactions:

Sen. Jim DeMint: "It's deeply disturbing to hear the vice president refer to Tea Parties as terrorists as did he today, holding a gun to the heads of Republicans and forcing us to make cuts."

Sen. Rand Paul (via Twitter): "Laughable to be called 'terrorist' by those holding economy hostage. Prefer to be thought of as freedom fighter."

And, of course, no list would be complete with out Sarah Palin (during a Fox News appearance):

"I think we're getting kind of used to being called names - racists, inciters of violence, being accused of things we have nothing to do with. ... I suppose it's a bit more appalling to have been called acting like terrorists by he who is second in command of the most powerful office in the world. It's quite appalling. It proves how out of touch this White House is."

For what it's worth, Joe Biden denies he actually used the word terrorism.

"I did not use the terrorism word," the VP told CBS News. "What happened was there were some people who said they felt like they were being held hostage by terrorists. I never said that they were terrorists or weren't terrorists, I just let them vent."

UPDATE Monday at 7:12 p.m.: The end of the debt ceiling standoff is officially in sight.

The House signed off on the latest debt/deficit proposal Monday evening, 269-161, clearing the way for the measure to head to the Senate, where it is expected to pass easily sometime Tuesday. (Right now, everyone's best bet is an early afternoon vote.)

The House vote went mostly as expected, with 95 Democrats joining 174 Republicans to pass the measure. The one surprise, however, was the appearance of Rep. Gabrielle Giffords, who returned to the House floor for the first time since she was shot in the head during an assassination attempt in January.

Her appearance was kept under wraps until shortly before the vote began. Lawmakers from both parties gave Giffords a standing ovation as she walked into the chamber to cast her vote in favor of the bill.

"The #Capitol looks beautiful and I am honored to be at work tonight," the congresswoman said in a statement posted to her Twitter account shortly after the vote concluded.

For those of us who need it, C-SPAN has a quick refresher on the final deal, which will head to the president's desk after it passes the Senate on Tuesday:

The measure would raise the debt ceiling in several steps lasting until 2013 and could reduce the federal budget deficit by about $2.1 trillion over a 10-year period. The plan calls for a special joint committee that would be tasked with recommending where about $1.2 trillion of that deficit reduction should come from- in spending cuts or revenue. Those recommendations would then have to be voted on by the full House and Senate under special rules. If the joint committee or Congress fail to act, the bill calls for automatic across-the-board cuts. The plan also requires the House and Senate to vote on a balanced budget amendment to the Constitution, which would require a 2/3 majority in both.

UPDATE at 5:17 p.m.: It now looks like the House vote will come closer to 7 p.m. Monday evening. Most signs point to passage. The Senate is then expected to follow suit and pass the measure sometime tomorrow.

UPDATE at 4:22 p.m.: Joe Biden made a trip to Congress on Monday to help win over skeptical House Democrats. Politico, citing unnamed sources in the room during the meeting, has the quote that is sure to make the rounds on the cable news shows this evening.

"They have acted like terrorists," Biden said, referring to conservative House Republicans.

Biden's comments, according to Politico's sources, came as the VP was agreeing with Rep. Mike Doyle, who is among a number of liberal Democrats unhappy with the recently negotiated deal that is set for a House vote this evening.

"We have negotiated with terrorists," Doyle said. "This small group of terrorists have made it impossible to spend any money."

UPDATE at 3:45 p.m.: Looks as if the House is on course for a 6:30 p.m. or so vote. The Senate, meanwhile, may wait until tomorrow to pass the bill, congressional aides tell the National Journal.

UPDATE at 1:52 p.m.: After staying mostly quiet on the topic during the months-long stalemate that appears to be finally (fingers crossed) nearing an end, Mitt Romney finally weighed in on the debt ceiling debate Monday.

The frontrunner for the Republican presidential nomination blasted the recently-brokered deal, saying that it "opens the door to higher taxes."

Here's his full statement: “As president, my plan would have produced a budget that was cut, capped and balanced—not one that opens the door to higher taxes and puts defense cuts on the table. President Obama’s leadership failure has pushed the economy to the brink at the eleventh hour and 59th minute. While I appreciate the extraordinarily difficult situation President Obama’s lack of leadership has placed Republican Members of Congress in, I personally cannot support this deal.”

Politico has the rundown on where some other GOP candidates come down on the issue: Michele Bachmann is against, Jon Huntsman is for it, and Tim Pawlenty has remained silent so far.

UPDATE at 1:09 p.m.: Despite some lingering complaints from conservative Republicans and liberal Democrats, the debt deal remains on track to reach President Obama's desk before the end of Tuesday.

The House is expected to vote on the bill sometime Monday evening, and the Senate will quickly follow, Politico reports.

Earlier Monday, Steny Hoyer, the Maryland Democrat in charge of rounding up his party's votes, said that John Boehner would need to find 150 Republican votes for the measure. That would mean that Hoyer is confident that at least 66 Democrats are ready to support the bill on the House floor.

UPDATE Monday at 9:12 a.m.: OK, here's where we stand with less than 40 hours until the debt deadline:

Congressional leaders and the White House are all on board with the latest deal, which would increase the debt limit by roughly $900 billion and come with nearly $1 trillion in spending cuts over the next decade. A new joint committee of lawmakers (to be named later) will be in charge of finding further cuts to the tune of $1.5 trillion by November, with the goal of enacting those cuts before the year's end.

To give lawmakers a little more motivation, if the committee fails to find the necessary cuts, there would be across-the-board reduction to both defense and nonsecurity discretionary spending. Under the deal, the president can raise the debt ceiling a second time early next year, baring a vote of disapproval by Congress (which would require a two-thirds majority).

Slate's David Weigel has more on the negotiations here.

But the work isn't done yet. Lawmakers are set to meet with their respective caucuses later this morning to be briefed on the details. The Senate is expected to move quickly, possibly passing the measure by the end of the day. Things in the House are a little more complicated. It remains unclear how many Republicans will vote for the bill (John Boehner had only two votes to spare for his more conservative version), meaning Nancy Pelosi will likely need to deliver enough Democratic support to push the effort over the finish line.

UPDATE Sunday 5:30 p.m.: Just a day ago, Senator Harry Reid was saying his Republican counterparts were not negotiating in good faith. But the Nevada Democrat now says that he has signed off on a deal that leaders have been working on over the last 24 hours.

A spokesperson for the Senator says that Reid's support of the deal depends on the support of his caucus, and little is known of the deal as it stands, though many on the left are already expressing anger that President Obama's and Democrats' movement towards demands of conservatives has left their own priorities out of the latest negotiations.

UPDATE Sunday 1:45 p.m.: The Senate has effectively voted down Democratic leader Harry Reid's debt limit plan, falling ten votes short of the necessary 60-vote margin to break Republicans filibuster, which began on Saturday.

Senator Reid spoke on the floor before the vote, saying he and others were "cautiously optomistic" that a deal could be reached in the next few hours that would allow ammendments to his bill that might garner bipartisan support, according to the New York Times.

Meanwhile, many focused not on the Senate floor's proceedings but on talks reportedly happening between the president, Republican leader Sen. Mitch McConnell and others might result in a $3 trillion debt deal before the U.S. Treasury's deadline on Tuesday.

UPDATE Sunday 11:30 a.m.: Senate Republican Leader Mitch McConnell says that his party members are very close to signing onto a plan along with Democrats and Republicans.

Speaking on CNN’s “State of the Union” Sunday, he said the current plan being discussed might include as much as $3 trillion in spending cuts.

“What conservatives want to do is cut spending,” he said. “We’ve come a long way."

Sen. McConnell's counterparts in the Senate were less optimistic; Sen. Chuck Schumer told the same program that “no one has signed off on a final agreement.” But Sen. Schumer, along with President Obama’s advisor David Plouffe, both expressed general optimism that a deal would be reached before Tuesday’s deadline, according to the New York Times.

Also in the deal could be plans for a constitutional amendment on a balanced budget—something Republicans had long pushed for. But raised revenues from taxes on the wealthiest Americans, which the president and Democrats had long argued for, did not appear to be part of the rough agreement. 

A bipartisan committee to help choose the cuts to be made did seem likely to be part of a final deal. Sen. McConnell, of Kentucky, said that a preliminary deal might start with $1 trillion in cuts, with further cuts to be identified by the 6-member committee.

One of the most contentious debates behind closed doors reportedly revolves around a question of a trigger that would force the joint committee to act if it couldn’t agree on where and how to make cuts. The Associated Press reports triggered cuts would come from Medicare and defense spending.

UPDATE Saturday 6:15 p.m.: And, they're back! To the drawing board. Congressional Republican leaders were reportedly back in talks with President Obama Saturday to find a last-minute solution to avoiding a U.S. default before Tuesday.

Republican Senator Mitch McConnell, who just yesterday seemed to be blocking movement on the Senate bill introduced by Democrats, told The New York Times, "We now have a level of seriousness with the right people at the table."

Of course, that bill was pre-emptively rejected by conservatives in the House, but both McConnell and Speaker John Boehner both expressed confidence that a deal would be reached and that they could rally the votes needed to pass a measure.

Democratic Senator Reid had a different story to tell. Reuters reports that Sen. Reid told reporters that despite earlier reports, "Republican leaders still refuse to negotiate in good faith."

UPDATE Saturday 12 p.m.: President Obama called again this morning for compromise in his weekly adress, but chances for a deal seem as dim as ever, as Democrats and Republicans on Capitol Hill continue to dig into their positions on opposite sides of the debate.

"For those who reflexively oppose tax increases on anybody, a lower credit rating could be a tax increase on everybody," President Obama said, referring to the possible downgrade of the country's AAA credit rating. "The power to solve this is in our hands. All that's needed is a simple vote that Democrats and Republicans have done for decades."

What both parties haven't done for decades, is have an approval rating this terrible. A new analysis by the Associated Press makes the point that even considering the possibility that Washington will eek out a deal on raising the debt limit before tuesday, the country's battered reputation among not only voters but international allies may only make for more debt and dysfunction.

Meanwhile, contradictions continue to surface about the most outspoken opponents to raising the debt limit. Bloomberg reports that districts represented by 60 Tea Party-supported Congress members opposing a deal received $43 billion in government contracts last year--twice the median of other House districts.

UPDATE Saturday 12:30 a.m.: The posturing and refusal to play nice continues in Congress. During a late night press conference on Capitol Hill, Senators Harry Reid, Chuck Schumer and Dick Durbin called for Republicans to stop filibustering against their proposal, which they had planned to intoduce after shelving House Speaker John Boehner's bill passed along mostly partisan lines Friday evening.

Reid said that despite a lot of "happy talk," his Republican counterpart Sen. Mitch McConnell refuses to speak to him about working with Democrats towards a deal on raising the debt ceiling.

"We have tried to compromise; that is not a bad word," Sen. Reid, of Nevada, said on the Senate floor Friday evening. "I had a tentative meeting set with Republican Senators this afternoon, and that meeting did not come to be. I have asked my friend the Republican leader to negotiate and he has chosen not to do that, and that's too bad."

New York's Senator Schumer hinted that a small group of Senate Republicans were willing to work with Democrats, but not until they received the green light from Senator McConnell. With a filibuster in the Senate, a vote will likely not happen until Monday, leaving both Asian and American markets to perhaps open with no glimmer of hope on the horizon, and a tiny window for finding compromise before the deadline set by the U.S. Treasury.

UPDATE Friday at 9:15 p.m.: Death came swift, as promised, to Speaker John Boehner's debt plan in the Senate, just hours after the Republican leader dragged his caucus through a painful 48 hours of closed-door deals and pleading. Tabled by the Senate indefinitely while a Democratic bill is introduced, according to The New York Times, the failure of Speaker Boehner's legislation was expected, but it leaves the precious few days remaining full of big questions. How will the world react? So far a chorus of leaders has called Washington's stalemate everything from a "mess" to irresponsibly "playing with fire."

Nonetheless, Reuters reports that despite the acrimony over Boehner's legislation, the rejection of the House bill may pave a way towards a final, last-ditch compromise before Tuesday's deadline to raise the debt ceiling.

UPDATE: After nearly two days of arm-twisting, John Boehner was able to shepherd his two-step debt proposal through the House on Friday evening.

The revamped measure, which now includes language that would force Congress to pass a constitutional amendment to balance the budget, passed with no Democratic support.

Senate leaders have already promised a quick death for the GOP bill, which had been seen as too conservative to pass the upper chamber long before Boehner agreed to tack on the constitutional amendment to appease his party’s right flank.

Senate Majority Leader Harry Reid, meanwhile, is at work on his own proposal to raise the debt ceiling before the Aug. 2 deadline. While that effort will face its own hurdles, namely House Republicans, it is seen by many observers as more likely to succeed in the gridlocked Congress, especially if he tweaks it to win over moderate Republicans.

Here's the latest look at what that effort would look like (via Politico):

Reid’s plan would extend the national debt ceiling through 2012 elections by about $2.7 trillion, and would cut about $2.2 trillion mainly to discretionary spending programs over the next decade. To implement deeper cuts, Reid proposes setting up a new 12-member panel of lawmakers to propose a sweeping array of changes to the tax code and entitlement programs.

Earlier Friday, Obama urged House Republicans to scrap their efforts to pass Boehner's bill, saying that the path to bipartisan compromise could be found in the framework of Reid's plan and a proposal from Senate Minority Leader Mitch McConnell.

“There are plenty of modifications we can make to either of these plans to get them through the House and the Senate,” Obama said. “This is one burden we can lift ourselves. We can end it with a simple vote.”

UPDATE at 3:11 p.m.: Confident he now has the votes to pass his revamped debt proposal, John Boehner plans to hold a House vote on the measure later this evening.

Republican aides tells the National Journal that a vote will likely happen sometime between 7 and 8 p.m. this evening. While GOP leaders were forced to postpone a scheduled vote on the effort twice Thursday, they appear in much better shape this time around now that Boehner's new bill looks a whole lot more like the "Cut, Cap and Balance" bill the House has already passed.

Of course Boehner's victory will be fleeting. Senate Democrats have already promised a quick death for the bill once it reaches the upper chamber and President Obama has likewise threatened to veto it if it somehow makes it to his desk.

For those wondering about such things, as of 3 p.m. Friday, lawmakers had 4 days and 9 hours before the clock strikes midnight on Aug. 2.

UPDATE Friday at 12:26 p.m.: Despite President Obama's latest plea for Congress to focus its effort on one of two potentially bipartisan bills in the Senate, John Boehner is pressing on with his own plans to pass a GOP-only bill later today.

After failing to secure the needed support last night to move his bill, Boehner is at work tweaking the measure to include a constitutional amendment that would require lawmakers to balance the budget, Politico reports.

That change would further ensure the bill would be doomed in the Senate, but it nonetheless appears to be winning over the conservative lawmakers Boehner needs for passage in the House.

Slate's David Weigel has more on the change here.

UPDATE Friday at 10:54 a.m.: President Obama renewed his call for bipartisan compromise Friday morning, saying that a common-sense deal was within reach and expressing confidence that “cooler heads will prevail.”

“There are plenty of ways out of this mess, but we are almost out of time,” Obama said.

The president’s remarks on the ongoing debt stalemate were his latest attempt to pressure Congress to raise the debt ceiling before Aug. 2, and to calm investors who have grown skittish about the possibility of a government default.

Obama said that the most likely deal would involve principals already in existing proposals from Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell.

“There are plenty of modifications we can make to either of these plans to get them through the House and the Senate,” Obama said. “This is one burden we can lift ourselves. We can end it with a simple vote.”

UPDATE Friday at 9:44 a.m: Republican leaders are regrouping this morning, hours after they had to pull John Boehner's two-step debt plan off the House floor after it become clear they didn't have the votes needed to pass it.

Late Thursday night, GOP officials suggested that they would try again today, although that now too seems in doubt. Eric Cantor, the House's no. 2 Republican, told Politico this morning that they will need to see where things stand after a morning caucus meeting.

“We’re going to go and have conference and we’ll see where members are,” Cantor said.

Thursday's chaos only makes a potential deal to raise the debt ceiling that much more uncertain with less than five days until the Aug. 2 deadline. Boehner's public failure to keep his party united has some already wondering about the long-term damage to his speakership. The GOP leader now faces one of two choices, neither of which is particularly politically appealing to the Ohio Republican: He can either rewrite his bill to appease conservatives, and then watch it fail in the Senate; or he can tweak it to win over a bloc of Democrats, and risk further alienation from his party's conservative flank.

UPDATE Thursday at 10:58 p.m.: So much for the Thursday debt vote.

Shortly before 10:30 p.m., John Boehner scrapped plans to hold a late-night vote on his two-step debt plan. Politico reports that GOP lawmakers are at work tweaking the bill in hopes of finding the necessary support, and plan to try again for passage sometime Friday.

UPDATE Thursday at 5:37 p.m.: House Speaker John Boehner has postponed Thursday’s expected vote on his debt proposal, a clear sign that the GOP leader doesn’t yet have enough support to pass the measure.

There is no official word yet on when the vote will now occur. Although Politico reports that House leaders say that the vote, originally scheduled for around 6 p.m., will still happen tonight.

The move comes after Boehner and other Republican leaders spent the day attempting to round up the needed support within their party to pass the bill. Earlier in the day, most observers – and even several Senate Democrats – believed that Boehner would be able to find the votes he needed.

But as of Thursday evening, that does not appear to be the case.

UPDATE Thursday at 3:40 p.m.: The House is still on pace to vote on John Boehner's bill this evening, likely sometime after the markets close. (Everyone's best guess right now is somewhere in the 5:45 p.m.-to-6 p.m. range.)

John Boehner admitted earlier today that he doesn't yet have the votes needed to pass his measure, but the House speaker said he was confident he would by the time the floor debate was over. So far, it looks as though things are going to be close. Very close.

With Democrats expected to maintain ranks and vote "no" on the bill, Boehner must limit Republican defections to 24. (Normally that number would be 23, but with two Democrats out of town with health concerns, Boehner has just a touch more wiggle room.)

The latest whip count from the National Journal lists 21 Republicans as definite "no" votes, and another four "leaning no." That means GOP leaders need to convince at least one lawmaker in the latter group to support the measure -- as well as win over another six undecided lawmakers currently listed as "undecided" -- in order to pass his proposal.

UPDATE Thursday at 1:15 p.m.: Harry Reid announced this afternoon that if the House passes John Boehner's bill later today, the Senate will move to take it up immediately.

"As soon as the House completes its vote tonight, the Senate will move to take up that bill," Reid said on the Senate floor. "It will be defeated. No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now."

Reid's comments suggest two things: 1) Senate Democrats are beginning to think that Boehner does in deed have the votes he needs to pass his bill in the House, and 2) Dems are eager to kill any momentum Boehner and Republicans may find after passing their proposal.

The Washington Post's Ezra Klein explains Reid's choices after defeating the GOP bill:

[T]here are two new paths he could take: He could bring his own plan up for a vote or he could try to come up with a compromise plan with Boehner and Senate Minority Leader Mitch McConnell. His plan is certain to fail in the House, so wasting time passing it through the Senate would be, well, wasting time.

UPDATE Thursday at 12:07 p.m.: House Republican met this morning for one final time about John Boehner's bill before it heads to the floor for a voter later today, and it appears as though the caucus meeting turned into something of a pep rally.

Slate's David Weigel has a look at the festivities:

The story [Rep. Peter King] really wanted to tell [after the meeting] was that of Rep. Mike Kelly, a freshman from Pennsylvania who played football at Notre Dame and had been looking like a "no" vote. Kelly had placed "Play Like a Champion Today" signs at the door, and when he spoke at the end of the meeting, he held up a big sign of his own.

"He gave a Knut Rockne-type speech," said King. "And it ended with 'Put on your helmet, buckle your chinstrap, and knock the shit out of 'em.' He delivered it well."

UPDATE Thursday at 10:02 a.m.: The House is set to vote later Thursday on John Boehner's two-step debt proposal.

Boehner and other Republican leaders have tweaked the original bill slightly to ensure that the spending cuts ($917 billion) now exceed the total amount that it would add to the debt ceiling ($900 billion). It's unclear if the changes will be enough to win over conservative skeptics, but GOP leaders have expressed increasing optimism that they now have the votes needed to move the bill in the lower chamber.

If House Democrats stay united in opposition, Boehner must limit defections from within his own party to 23 to pass his measure. That means that the bill's fate will likely rest with a group of 39 Republicans who have signed a "cut, cap and balance" pledge.

The Hill does the math:

Nineteen of those 39 have said they will oppose, or will likely oppose, Boehner's bill. Only six of them have publicly committed to backing the bill, or are leaning toward supporting it.Then there are 14 others who have not said how they will vote.

UPDATE Wednesday at 2:45 p.m.: This may explain John Boehner's tough talk.

A senior House aide tells the Washington Post that after aggressive lobbying by their party's leaders, not a single House Democrat will break ranks and vote for the GOP bill when it reaches the floor Thursday.

WaPo explains what it all means: "If this bears out—and it’s important to emphasize that nothing is ever certain in the alternate universe otherwise known as the United States Congress—it could be a very big deal. It means that House Republicans need all Republican votes to pass the Boehner plan, which would hike the debt ceiling in stages, and significantly reduces the margin of error House GOP vote counters have at their disposal."

UPDATE at 1:42 p.m.: John Boehner issued a stern warning to the Republican rank-and-file Wednesday, telling them: "Get your ass in line."

Boehner met with his caucus for a morning briefing, where he told lawmakers that passing his two-step bill would pressure Senate Democrats to drop their opposition to it. "This is the bill. I can’t do this job unless you’re behind me," Boehner said, people who attended the meeting told the New York Times.

With one day before a likely vote on the measure, Boehner and other GOP leaders are slowly making headway in winning over their conservative base. Still, the House speaker is far from assured a victory if his bill comes up for a vote.

UPDATE at 9:45 a.m.: The Congressional Budget Office has weighed in on Senate Majority Leader Harry Reid's debt proposal, and it—like John Boehner's—comes up well short of the promised savings.

According to the CBO analysis, Reid's proposal would cut the deficit by $2.2 trillion over the next 10 years, roughly $500 billion less than he had estimated, The Hill reports.

UPDATE Wednesday at 9:15 a.m.: House Republican leaders have pushed back a vote on John Boehner's two-step proposal until Thursday.

Boehner had hoped to hold a vote on the bill later today, but those efforts were abandoned as he and other GOP leaders attempt to win over a group of skeptical conservatives who are unhappy with the bill.

The House speaker will have his work cut out for him, particularly after the Congressional Budget Office said late Tuesday that his plan would only reduce the deficit by $850 billion over the next decade, far less than the $1.2 trillion that Boehner had estimated.

UPDATE Tuesday at 4:35 p.m.: John Boehner is having some serious trouble rounding up the support he needs to pass his two-step plan.

A number of House conservatives are up in arms about the proposal and Rep. Jim Jordan, chairman of the conservative Republican Study Committee, said Tuesday that he's "confident" that Boehner doesn't have the votes to move his bill through the lower chamber.

Meanwhile, a number of conservative heavyweights including the lobbying arm of the Heritage Foundation and the Club or Growth have, likewise, come out against Boehner's plan.

The conservatives are still holding out hope that the House-passed "Cut, Cap and Balance" bill (which comes complete with a constitutional amendment to balance the budget) will be the vehicle to raise the debt ceiling.

The Wall Street Journal has a look at the math on Boehner's bill:

Without any Democratic support, Mr. Boehner can only afford to lose 23 votes for his plan to pass the House. So far, 12 House Republicans, including presidential candidate Michele Bachmann of Minnesota, are on the record opposing the Boehner plan. House Minority Whip Steny Hoyer (D., Md.) said "very few" Democratic representatives would back the Boehner plan, scheduled for a vote Wednesday. Mr. Jordan heads a group that includes 178 of the 240 Republican House lawmakers.

Even if Boehner's plan were to pass the House, it faces a likely defeat in the Democratic-controlled Senate and a possible White House veto. Still, a defeat in the House would be somewhat shocking given its potential to undermine Boehner's leverage in the ongoing debt talks.

UPDATE at 2:46 p.m.: The White House on Tuesday ruled out the so-called constitutional option, saying that the much-discussed 14th Amendment was "not available" to bring an end to the increasingly dire standoff.

"There are no easy ways out here. There are no tricks, there is no citing of the Constitution that suddenly allows us to borrow," White House spokesman Jay Carney told reporters at Tuesday afternoon's briefing. "It's not available."

According to some interpretations of the 14th Amendment, the president can take all necessary steps to maintain the good credit of the United States. Earlier this month, Bill Clinton said that if he were in Obama's shoes he would raise the debt ceiling on his own “without hesitation, and force the courts to stop me.”

UPDATE at 2 p.m.: With neither side willing to budge, what happens next?

The Washington Post has an interesting look at Senate Democrats' game plan, which is basically to sit tight and wait and see whether John Boehner is able to find the support to pass his two-step plain in the House.

If Boehner fails to find the necessary conservative votes to pass his bill, that would obviously weaken the House GOP leader's hand in the larger debate.

But even if he succeeds in passing his bill, Senate Dems would then break out their procedural handbooks to use the House bill as a shell for Harry Reid's plan. Because of some nitty-gritty congressional rules we won't tackle here, that would actually allow Reid to move his proposal faster in the Senate than he otherwise would be able to.

UPDATE Tuesday at 9:45 a.m.: What we learned from Monday night's dueling prime-time speeches: President Obama and John Boehner remain nowhere close to striking a deal needed to lift the debt ceiling before Aug. 2.

Obama reiterated his support of Harry Reid's backup plan, while Boehner again attempted to make the case for his two-step Plan B. What makes things appear even more dire is that it appears uncertain that either proposal can pass in their respective chambers, let alone the full Congress.

Here's how Politico summed it up:

If regular citizens—or markets here and overseas — were looking for reassurance in Obama’s 15-minute speech or House Speaker John Boehner’s five-minute rebuttal, they were out of luck. Instead, the men who hold the fiscal destiny of nearly 312 million people in their hands treated viewers to the unsettling spectacle of two leaders talking past, not to, each other.

One thing noteworthy from Obama's speech, reports the National Journal, is that the president didn't drop the V-Bomb:

While Obama warned House Speaker John Boehner not to turn Americans into "collateral damage," he did not vow to veto the bill Boehner's now pushing to lift the debt ceiling by $1 trillion (good for six months). Boehner's two-step process would impose $1.2 trillion in spending cuts and establish a select congressional commission to propose an additional $1.8 trillion in savings by Thanksgiving.

And the backstory, via the Washington Post:

The government has exceeded its $14.3 trillion debt limit, and Treasury Secretary Timothy F. Geithner has said that without action by Aug. 2, the government will not be able to pay its bills. Credit-rating firms warned that they could downgrade the U.S. debt, which could spur higher interest rates and cause aftershocks in global markets.

UPDATE Mondaty at 4:31 p.m.: President Obama will deliver a prime-time address at 9 p.m. on the current stalemate, the White House announced Monday.

UPDATE Monday at 3:46 p.m.: The White House on Monday endorsed Harry Reid's backup plan to avoid a government default, saying that additional spending and tax reforms could be added after it passed.

"The plan would make a meaningful down payment in addressing our fiscal challenge, and we could continue to work together to build on it with a balanced approach to deficit reduction that includes additional spending reforms and closing tax loopholes for corporations, millionaires and billionaires," White House press secretary Jay Carney said in a statement.

John Boehner, meanwhile, spent the afternoon trying to sell his Plan B to his fellow conservatives. Politico reports that in a closed-door meeting with House Republicans, "Boehner tempered expectations saying it is not identical to the Cut, Cap and Balance Act the House approved last week, but it’s a plan he says can clear both chambers of Congress without raising taxes."

UPDATE Monday at 9:27 a.m.: Washington missed its latest self-imposed deadline Sunday, and both sides are still nowhere close to the bipartisan compromise needed to raise the debt ceiling by Aug. 2.

House Speaker John Boehner, R, and Senate Majority Leader Harry Reid, D, are now both at work on separate backup plans aimed at avoiding government default, but it remains far from clear whether either will be able to find the needed support in a divided Congress in time.

The biggest news to come from the backup plans is that Reid appears to have accepted the GOP’s main demand of not including any tax increases in his developing package, which includes $2.7 trillion in spending cuts and would raise the debt limit by $2.4 trillion through the 2012 election, the New York Times reports.

Boehner’s plan, meanwhile, is less clear but is thought to be a two-step plan that would cut $1 trillion in spending and extend the debt limit through the end of the year.

ORIGINAL POST Sunday at 2:56 p.m. by Ben Johnson: Congressional leaders, like so many procrastinating students, seem destined to produce disappointing work at the last minute.  If they don’t blow deadline, of course.

After a breakdown in talks between President Obama and House Speaker John Boehner on Friday and an intense Saturday morning meeting at the White House, legislators continued to scramble Sunday in hopes of finding a deal on raising the debt ceiling and tackling the country’s apparent spending and revenue problems.

The hope was to find a glimmer of compromise before Asian markets opened Monday. Treasury Timothy Geithner reiterated the possibility that dithering on a solution could cause serious harm and send a shockwave to world economies on Sunday.

“The most important thing is that we remove this threat of default,” Geithner said on CNN’s “State of the Union.” “You want to take this out of politics.”

But politicians on both sides, though committed to make an announcement Sunday afternoon in the hopes of reassuring markets, continued to stake out positions on the debt limit fight.

According to the New York Times, House Speaker John Boehner told Fox News Sunday, “my last offer is still out there. I’ve never taken my last offer off the table.”

Boehner was apparently referring to a deal that promised some $800 billion in revenues and significant spending cuts. He also said Sunday that he did not agree with President Obama’s assertion that any plan to raise the debt limit must take the country through the 2012 elections — a length the president says will assure confidence in fragile world markets.

White House Chief of Staff William Daley, meanwhile, characterized the two sides moving ever closer to the point of no return, reiterating that Congress needed to take up a plan by the end of Monday to assure passage in time for the Aug. 2 deadline.  He signaled that the president would probably veto a bill with any extension that didn’t raise the debt ceiling through the end of 2012, though it seemed unlikely such a bill would make it through congress.

“We are now getting to a point where markets around the world will question whether the political system can come together and compromise for the good of the country,” Daley told NBC’s Meet the Press.

Still in question is the proposed 14^th Amendment provision, a path towards unilateral action by the president that has thus far been rejected by Obama but suggested by others, including former President Bill Clinton. Law professors speaking to the New York Times seemed split on how the country would react and whether Congress might pursue impeachment in response to such a move from the president, even in national dire straits.

Correction: An earlier version of this article listed Senator Reid as representing the state of Utah.