Boehner and Obama Close to Deal, Leaders Are Told

With the government staring at a potential default in less than two weeks, the officials said the administration on Wednesday night notified top members of Congress that an agreement between the president and Mr. Boehner could be imminent. The Congressional leaders, whose help Mr. Obama would need to bring a compromise forward, were told that the new revenue tied to the looming agreement to increase the debt limit by Aug. 2 would be produced in 2012 through a tax code rewrite that would lower individual and corporate rates, close loopholes, end tax breaks and make other adjustments to produce revenue gains.

Officials knowledgeable about the conversations between the administration and Congressional leaders said the details of the potential package remained unknown but they presumed it would include cuts and adjustments in most federal programs, including Medicare.

However, officials on all sides of the tense negotiations warned that no firm deal was in hand yet, and tried to play down the progress — if only to stave off attempts to block it or influence its shape by hardliners on both sides of the debate on taxes and spending.

“While we are keeping the lines of communication open, there is no ‘deal’ and no progress to report,” said Kevin Smith, a spokesman for Mr. Boehner.

The White House denied that any deal is imminent. Jay Carney, the White House press secretary, said that “there is no deal. We are not close to a deal.”

The same fiscal and political issues that stymied earlier negotiations between Mr. Obama and Mr. Boehner remain, including how much a deal would raise in new revenues over all. Democratic and Republican leaders in both chambers were resistant to an Obama-Boehner deal for separate political reasons — the Republicans because of party opposition to new taxes and Democrats because many want to campaign in 2012 against Republicans’ proposed deep cuts in Medicare and Medicaid and a compromise, they believe, would make that harder.

An agreement along the lines of the one being discussed would likely rile Democrats, who could view it as more tilted toward Republican priorities than a bipartisan plan issued by the so-called Gang of Six senators this week; its prospects with conservative House Republicans were uncertain as well. Though it would initially appear to meet Republican demands for less reliance on new revenues as part of what Democrats have called a “balanced” approach, Republicans could be uneasy about accepting a plan tied to a higher future revenues through tax changes.

“The trick on this has always been the tax issue,” one Republican said.

While no meetings at the White House were scheduled, aides expected the president and the speaker to begin to inform other lawmakers of the framework they were discussing as they continued to try to strike a major deficit reduction agreement and avoid a federal default.

Other alternative solutions in Congress appeared to be faltering as the Senate on Thursday took up and prepared to defeat a conservative House Republican plan to cut spending and a backup plan being prepared in the Senate was meeting stiff resistance from the House.

The Senate majority leader, Harry Reid, began the morning on the Senate floor Thursday by ridiculing the House for taking the weekend off, as the Senate prepares for a weekend of work, including a vote on the deficit-reduction plan passed this week across the Rotunda. House members had been told earlier in the week to plan for a potential weekend stay in the capital, but their majority Leader, Eric Cantor, said Wednesday night that was not happening.

The return of House members to their home states is “just untoward,” Mr. Reid said, “and that’s the kindest words I can say. For the House of Representatives to be out this weekend, what a bad picture that shows the country.”

 As President Obama and Congressional leaders continued to scramble to put together some form of broad deficit-reduction plan that would allow the nation’s debt ceiling to be lifted next month, the Senate began to debate the House bill, known as Cut Cap and Balance, in preparation for a vote on Saturday.

Over the weekend, that chamber is also expected to move toward a vote on a plan proposed by Senator Mitch McConnell of Kentucky that would allow the president to lift the debt ceiling without the members of Congress officially concurring with the move. That measure could be voted on early next week.

 “The House has passed the Cut, Cap and Balance plan with bipartisan support,” Mr. Smith said. “We’re waiting for the Senate, which is run by Senator Reid, to act on it.” (It is a sign of the times on the Hill these days that five Democrats joining 229 Republicans to pass legislation, counts as “bipartisan support.”)

That House bill, which, among other measures, would require a balanced-budget amendment to the Constitution be sent to the states before the debt limit can go up, “doesn’t have one chance in a million of passing the Senate,” Mr. Reid, of Nevada, said.

Senator Kent Conrad, a Democrat from North Dakota, who served on Mr. Obama’s fiscal commission, was first out of the box, calling the bill on the floor “some of the most ill considered legislation that I’ve ever seen come over from the other body,” and “super partisan,” and “truly radical.”

Senator Kay Bailey Hutchison, a Republican of Texas, came second, countering that the House legislation was a “good start.”

As the capital markets continued to assess the possibility of American default on its debt, R. Bruce Josten, the executive vice president for government affairs the United States Chamber of Commerce, wrote a blog post warning that such a potential default “has real, immediate, and potentially catastrophic consequences.”

Warning of the possibility of heightened interest rates, and blaming no party, Mr. Josten wrote, “Now, makes no mistake; too much spending and the need for real entitlement reform has led to the debt crisis we’re in today. But jeopardizing our country’s credit rating and fiscal security by refusing to compromise isn’t the answer.”

At a news conference Thursday morning, Mr. Boehner said that the ball was now in Mr. Obama’s court, “”and has been there for some time.”

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