A fourth consecutive day of talks at the White House for a deal to raise the debt ceiling by Aug. 2 ended abruptly Wednesday night, with President Obama walking out on a meeting with congressional leaders. That was hours after the credit-ratings agency Moody's threatened to cut the U.S. credit rating, warning of an increased risk of a government debt default.
Meanwhile, GOP congressional leaders in particular are increasingly at odds with members of their own party in the debt-ceiling debate.
House Speaker John Boehner sounded a tad exasperated earlier this week on Fox News when asked whether he had enough votes in his big Republican majority to raise the debt ceiling.
"We have a number of our members who just don't believe that they should ever vote to increase the debt ceiling," Boehner said.
In fact, as many as half of the House Republicans now appear inclined to vote against increasing the nation's legal borrowing limit — something Congress has already done 89 times since 1939. Obama warned on CBS this week that not raising the debt ceiling by Aug. 2 could mean some people will not get their monthly Social Security checks.
"There may simply not be the money in the coffers to do it," he said.
In a Web video posted Wednesday, freshman House Republican Joe Walsh of Illinois accused the president of misleading people.
"President Obama, quit lying," Walsh said. "You know darn well that if Aug. 2 comes and goes, there's plenty of money to pay off our debt and cover all of our Social Security obligations."
Walsh, who got elected with strong Tea Party backing, is a leading member of what's been dubbed the "Hell, No caucus" — the Republican lawmakers who refuse to raise the debt ceiling. House Tea Party Caucus Chairwoman Michele Bachmann of Minnesota, who is running for president, accused Obama and Treasury Secretary Timothy Geithner of selling the nation a bill of goods.
"It's this: that if Congress fails to raise the debt ceiling by $2.5 trillion, that somehow the United States will go into default and we will lose the full faith and credit of the United States," she said. "That is simply not true."
That puts Bachmann and many other House Republicans at odds with Boehner, who had this warning in the Fox News interview: "Missing Aug. 2 could spook the market, and you could have a real catastrophe. Nobody wants that to happen."
Will Opposition Backfire?
Fellow House Republican Louie Gohmert of Texas says he thinks Boehner has been bamboozled.
"The problem with the speaker, in him saying that, is he believed the president, and I will encourage the speaker not to believe the president anymore," he said.
Gohmert and other House Republicans are pushing legislation that puts active-duty service members and debt holders at the head of the line for government payments if the debt ceiling is not raised. Their willingness to allow at least a partial default on the debt alarms Senate Republican leader Mitch McConnell. He told radio host Laura Ingraham on Wednesday that Republicans would be saddled with the blame for a default. That, he said, would put them in a very bad position for next year's election.
"We knew shutting down the government in 1995 was not going to work for us," he said. "It helped Bill Clinton get re-elected. I refuse to help Barack Obama get re-elected by marching Republicans into a position where we have co-ownership of a bad economy."
McConnell has proposed a plan in which Congress would authorize Obama to raise the debt ceiling, without any of the massive deficit reduction that Republicans have been demanding. It's a fallback plan to be used only if a deal cannot be reached among negotiators.
But Tennessee Republican Sen. Bob Corker calls it an embarrassment.
"This place is way too caught up in trying to protect each side for the 2012 elections," he said.
Still, Lamar Alexander, Tennessee's other GOP senator, predicts McConnell's contingency plan will only keep looking better.
"I think after about one week, maybe two weeks, there are going to be a lot of Republicans and a lot of Democrats thanking Sen. McConnell for leaving an option on the table so that we don't have a default," he said.
But there likely won't be many thanks from the "Hell, No caucus."