No U.S. debt deal as Republicans, Democrats clash
Chance of technical default 20%, investor says
WASHINGTON (MarketWatch) — Efforts to conclude a plan to increase the debt ceiling showed little progress Sunday night as lawmakers still haven’t agreed a path forward to avoiding a potential default despite a weekend of talks.
Sunday night President Barack Obama met two lawmakers from his own party, House Democratic Leader Nancy Pelosi and Senate Majority Leader Harry Reid.
“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,” the White House said in a statement.
Republican Sen. Tom Coburn, one on the Gang of Six who outlined their own deficit-cutting plan, told NBC on Sunday that opposition to a short-term deal was a “ridiculous” position “because that’s what he’s going to get presented with.”
Boehner and Obama talked over the phone twice, the Associated Press reported citing a Congressional source.
“We may have a few stressful days coming up, and stressful for the markets of the world and the American people,” he said.
The market reaction was negative. S&P 500 futures
/quotes/zigman/1277190 SP1U
-0.84%
fell by 0.8%. Benchmark gold futures
/quotes/zigman/700181 GC1Q
+0.59%
climbed into record territory. The contract was recently up $16.30, or 1.0%, to $1,617.70 an ounce.
Michael Turner, a Sydney-based strategist for RBC Capital Markets, said the Boehner plan may not be good for saving the AAA debt rating of the U.S.
“This is unlikely to please ratings agencies, particularly S&P who have been the most vocal in expressing a need to see a longer term deficit reduction plan sooner rather than later,” Turner said in a note to clients.
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