MercoPress. South Atlantic News Agency

US debt ceiling: Republicans insist in torpedoing Obama 2012 re-election bid

Geithner: “unthinkable the US will not meet its obligations”

US President Barack Obama reiterated on Sunday his opposition to any short-term plan to raise the US debt ceiling, while Republicans insisted on a two-step solution, a White House official said.

Obama met with Senate Majority leader Harry Reid and House Minority leader Nancy Pelosi on Sunday evening amid intensive negotiations to strike a deal to raise the country's 14.29 trillion dollars borrowing limit and avert an unprecedented Aug. 2 debt default.

“In the meeting the president 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,” said the White House official.

Obama said on Friday that his only bottom line is to extend the debt limit by enough to avoid another politically painful vote before his November 2012 re-election bid.

House Speaker John Boehner said Sunday that raising the debt limit is “a two-stage process,” as “it's just not physically possible to do all of this in one step.” The two-stage strategy would give the Treasury only about 1 trillion dollars in additional borrowing authority, forcing another debt-limit battle next year.

With the clock ticking down to the Aug. 2 deadline, Washington's leaders are running out of time.

US Treasury Secretary Timothy Geithner said Sunday that the legislative process needs to get started by Monday night to avoid a possible default, as legislation takes days to move through Congress.

He added it was unthinkable for the United States not to meet its debt obligations and he is confident a deal to raise the debt ceiling will get done.

Speaking on CNN's “State of the Union” program, Geithner said it was critical that Congress approve a new debt ceiling that gets the country into 2013, past the November 2012 presidential election.

“It's unthinkable that this country will not meet its obligations on time. It's just unthinkable we'd ever do that. It's not going to happen,” he said.

“The most important thing is that we remove this threat of default from the country for the next 18 months,” Geithner added. ”What the leaders know is that they need to agree on something together that will pass the House (of Representatives), pass the Senate that the president can accept.“

”What we cannot do -because it would be irresponsible- is to leave the threat of default hanging over the US economy for a longer period of time,” Geithner said.

However negotiations toward that agreement have whipsawed for weeks, finally hitting a brick wall over taxes, one of the most ideologically divisive issues in US politics.