Obama open to short-term debt fix if big deal agreed

WASHINGTON,  (Reuters) – The White House signaled on  Wednesday it could support a short-term increase in the U.S.  borrowing limit for “a few days” if lawmakers agreed to a broad  deficit reduction deal but needed more time to pass it.

The move, a shift from President Barack Obama’s previous  position, reflects the growing political reality that time is  short for Congress to pass a massive deficit-cutting deal  before the United States runs out of money on Aug. 2.

A new proposal for long-term deficit reduction from a  bipartisan group of senators known as the Gang of Six has  revived hope that a broad agreement on spending cuts can be  reached to avoid a looming default and alleviate pressure on  America’s triple-A credit rating.

Republicans do not want to support increasing the debt  limit without deep spending cuts. Democrats want tax increases  for the wealthiest Americans to be part of a deficit cutting  package, an option most Republicans rule out.

Obama had vehemently opposed a short-term extension of the  $14.3 trillion debt limit as a solution to the dilemma, and the  White House reiterated that stance on Wednesday — but with a  caveat.

Obama’s spokesman Jay Carney said in a written statement  that the president would consider supporting a short-term fix  if a deal had been reached “and we needed a very short-term  extension (like a few days) to allow a bit of extra time for a  bill to work its way through the legislative process.”

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