Obama Endorses Reid Plan, Democrats Call It "Offer Republicans Can't Refuse," Boehner Says "It's Full Of Gimmicks"

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August 2nd is rapidly approaching, and Congress remains nowhere near an agreement to raise the debt limit and lower the deficit.We’ll be bringing you the latest on the negotiations here all day. (You can view our live blog from Sunday here.)

Read below for the day’s developments. Click here for the latest on the talks.

7:13pm | We’re transitioning over to our coverage of the addresses by President Obama and Speaker Boehner tonight. Click here for the live blog.

6:51pm | Speaker of the House John Boehner’s campaign committee has drawn increasingly from Wall Street sources, with Paulson & Co. now the leading employer of Boehner donors. Read more here.

5:56pm | Boehner says he will highlight the GOP deficit reduction plan in his response to Obama’s address tonight.

5:54pm | The Washington Post’s Ezra Klein says there is an easy compromise between the Reid and Boehner proposals. He says a proposal with Reid’s spending cuts and long-term debt limit increase, coupled with spending caps and an agreement to vote on a balanced budget amendment (which is dead in the Senate) may seal the deal. Read his take here.

5:52pm | The anti-tax group Americans for Tax Reform has endorsed the Boehner debt ceiling plan, saying “This plan is good for taxpayers, children and other living things.” Their statement can be found here.

5:47pm | Speaker of the House John Boehner will give the GOP response to President Obama’s address tonight. A response from congressional opposition as seen after the State of the Union is a bit unusual on policy matters.

5:46pm | Senate Democrats have released this fact sheet arguing Republicans have agreed to 100% of the cuts included in the Reid plan. [link].
 

4:52pm | MoveOn.org has released a statement critical of the Reid plan for not including enough revenues. If anything, this will help the plan gain Republican support.

4:42pm | House Minority Leader Nancy Pelosi on the debt talks (via AFP’s Olivier Knox): “it is clear we must enter an era of austerity.”

4:41pm | Boehner spokesman Brendan Buck just tweeted: “The President has requested primetime to discuss an issue for which he has thus far presented no solution.“

4:32pm | From The New York Times’ Brian Stelter: The White House VERY quietly reached out to TV networks earlier today to inquire about prime time air time for a speech….

4:26pm | President Obama will address the nation on the status of debt talks tonight at 9PM according to the White House.
 

4:19pm | A lose-lose-lose-lose-lose scenario: The New York Times takes a look at five possible outcomes for the debt ceiling debate. Check it out here:

4:11pm | Boehner still pushing for balanced budget amendment, says delaying vote to later this year will give GOP more time to build support to pass it. He called it “the ultimate enforcement mechanism” for reigning in government spending.
 

4:10pm | Boehner adds the Reid plan doesn’t deal with entitlements, but stops short of saying he will oppose it.

4:09pm | Boehner says the Reid plan “is full of gimmicks”.

4:06pm | GOP Whip Kevin McCarthy says Obama is “more concerned over politics than people.“

4:06pm | Cantor says this plan is one where no side gets what they want — says Obama’s concession is a plan that does not extend the debt ceiling past 2012 election.
 

4:04pm | Boehner says it is not perfect, but urges House and Senate to pass it. He calls it a common sense plan, and says it would be “irresponsible for Obama to veto it.“

4:04pm | Boehner speaking now. He says his “plan represents a bipartisan negotiation over the weekend.“
 

3:58pm | Bloomberg added: No rational analysis,” can reduce deficit “without combination of cutting spending and raising revenues.”.
 

3:56pm | New York City Mayor Michael Bloomberg on the debt ceiling talks:
“There’s something profoundly wrong in Washington…Should Washington fail to raise the debt ceiling, the rest of the world would never again be as confident in America.”

3:53pm | We’ve updated our post on the Reid plan with the complete proposal. Click here for details.

3:50pm | Cantor added that he thinks Obama is opposing the GOP plan for political reasons:
“Though he has warned Congress not to call his bluff, I remain hopeful that he and his party will work with us to move forward on this common sense plan and won’t leave the strength of the economy and millions of American jobs hanging in the balance for election year political posturing.”

3:46pm | House Majority Leader Eric Cantor called on Democrats and President Obama to back the GOP proposal in a statement released Monday afternoon:
“The two-step framework that the Speaker and I laid out to our members today is not perfect – as we’ve said for months, we would have much preferred to vote to increase the debt limit only once, but the President and his party continued to make demands which we cannot meet – namely tax increases.“

3:42pm | The GOP proposal has been officially released. Click here for the details.

3:25pm | Speaker of the House John Boehner briefed Rush Limbaugh on his deficit reduction proposal before his own caucus, The Hill reports.

3:24pm | Reality check for House GOP: A balanced budget amendment to the Constitution has ZERO chance of passing the Senate.

3:20pm | Some GOP lawmakers are not ready to support the Boehner deficit reduction proposal, after the GOP caucus meeting this afternoon. They reportedly want more immediate spending cuts and a guaranteed balanced budget amendment, not just a promise of a vote.

3:12pm | More from White House Press Secretary Jay Carney: 
“Senator Reid’s plan also reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans, and, most importantly, it removes the cloud of a possible default from our economy through 2012.“

3:08pm | The White House has released a statement supportive of the Reid plan:
“Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court.“

3:07pm | Across the aisle, trouble is brewing for the GOP plan to be introduced later today by Speaker of the House John Boehner. The Cut, Cap & Balance coalition has rejected Boehner’s debt proposal, according to The Huffington Post’s Jennifer Bendery.

3:01pm | Reid says he will put his plan on the floor “sometime tonight.“

3:00pm | Reid says Obama will “of course” endorse his plan.

2:58pm | Schumer says “we have moved in their direction so many times and they don’t budge.” He added “It’s just not fair.“

2:58pm | Reid is speaking of President Obama’s involvement in the past tense. Another sign he is playing a very limited role at this point.

2:54pm | Reid says Congress has raised the debt limit for a short-term, but “never with conditions”.

2:53pm | Reid to McConnell: “Nice try, but don’t blame this on the president”.

2:51pm | Schumer calls Reid plan “a good deal” saying there is no other alternative to a default.

2:50pm | Schumer on GOP: “If they can’t accept [Senate Dems’] offer, it simply means they want to default for whatever reason..

2:49pm | Schumer: “This is an offer that Republicans can’t refuse.”.

2:48pm | Schumer pushes back at Republican claims that war savings should not be included in deficit reduction claims, saying if the wars can increase the deficit, they can reduce it. Schumer notes that Rep. Paul Ryan included war savings in his budget plan, and that they have been scored by the Congressional Budget Office to produce $1 trillion in savings.

2:47pm | Schumer: While Republicans offer a plan that will never fly, the Senate is offering something that will break this impasse.

2:45pm | Sen. Chuck Schumer (D-NY) is sharply criticising the Republican two-stage debt limit increase plan, warning it is “dangerous.“

2:43pm | Reid says he will bring his plan to the floor today.

2:42pm | Reid says his plan includes a long term increase, safeguards entitlement programs, and meets Republican demands for spending cuts.

2:40pm | Reid says Republicans are trying to force Congress to have the same debate, on the same subject a few months from now. He says the short-term extension is “a non-starter in the Senate, and in the White House.“

2:39pm | Reid says he spent all weekend trying to work with Republicans. “Instead of moving forward, we went backwards.“

2:29pm | The Reid Plan [link].

2:27pm | Reid’s plan would raise the debt limit through the end of 2012, while cutting the deficit by $2.7 trillion. His deficit reduction package would not include entitlement reform or tax increases, but includes $1 trillion in savings from the wars in Iraq and Afghanistan. $400 billion would come from interest savings.

2:26pm | Senate Majority Leader Harry Reid is expected to lay out the Democratic plan to raise the debt limit and lower the deficit at 2:30. Stay tuned for updates.

2:24pm | White House Communications Director Dan Pfeiffer said Monday afternoon that “stories saying that POTUS rejected a bipartisan proposal are false, Sen Reid never agreed to a short term deal,” per his spokesman.

2:21pm | McConnell added that President Obama rejected a “bipartisan” deficit reduction plan “out of hand” over the weekend. It is not clear which plan he is referring to.

2:18pm | In his speech to La Raza, Obama called once again for a balanced approach to deficit reduction, including tax reform. Both the Reid and Boehner plans would not raise revenues.

2:17pm | McConnell is criticising President Obama for requesting a debt limit increase through the 2012 election.

2:16pm | Speaking on the Senate Floor, Minority Leader Mitch McConnell says “Americans, including me, are confused and frustrated with Congress over debt.”

2:05pm | Charles Gasparino is claiming the White House is reaching out to bankers to tell them the government will not default if the debt ceiling isn’t raised by August 2nd. By most accounts the government has enough money to prioritise payments for at least a week.
 

1:55pm | Senate Democrats have posted this video on “the consequences of default.” describing how failure to raise the debt limit impacts average Americans.

1:51pm | According to GOP aides, the GOP plan will include spending caps on all future spending, as well as a call for a vote on a balanced budget amendment to the Constitution before October 1st.

1:51pm | Speaker of the House John Boehner are GOP leaders will hold a press conference at 4 p.m. to present their debt limit plan. This comes after the 2:30 Democratic news conference.

1:48pm | GOP leaders are arguing their two-step debt limit increase would hold President Obama to accepting steep spending cuts.
  

1:43pm | Rep. Steve King (R-IA) warned today that President Obama could be impeached if the government defaulted:
“STOP talking about default. The 1st dime of each $1 of revenue services debt. Obama would be impeached if he blocked debt payments. C C & B!”.

12:50pm | Senate Majority Leader Harry Reid will hold a press conference at 2:30 today to present his debt limit plan. House Republicans will be briefed on their own deficit reduction package at that time. It appears Reid is looking to get a jump on Boehner with his newser.

12:30pm | More details are also emerging on the GOP plan introduced by Boehner. It would reportedly cut $1 trillion from the deficit now, and raise the debt limit into the first part of 2012.
A second vote to raise the borrowing ceiling would be required next year, after Congress acts on steeper deficit reduction proposed by a bipartisan fiscal commission.

12:28pm | Reid’s plan would raise the debt limit through the end of 2012 — a key Democratic objective. He is expected to provide more details on the plan later today.

12:25pm | According to The Huffington Post’s Sam Stein, the Reid debt plan would not include entitlement reforms, and includes $1 trillion in savings from the wars in iraq and Afghanistan. Both items will likely prove objectionable to Republican lawmakers.

12:08pm | Democrats are seizing on this quote from a Bloomberg article published today on the debt limit debate to argue against any short-term increase:
“Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co., said markets view a two-stage plan as a “non-starter because we now know it is amateur hour on Capitol Hill and we don’t want to be painted in this corner again.”

“There is significant risk of a downgrade with a deal that ties further cuts to another vote only a few months down the road given the significant resistance to do the right thing now,” Cooper said.

11:53am | Bank of America is expecting a downgrade of the U.S. credit rating to AA within the next year. The investment note, obtained by POLITICO’s Ben Smith, reads:
“We expect the US credit rating to remain on negative outlook and for a downgrade to AA to occur only when the rating agencies believe there will be no serious follow through. This means a downgrade would not likely occur until after the six month period of negotiations which puts us in early next year.”

11:43am | The Washington Post reports today that House Majority Leader Eric Cantor’s hardline position on new taxes in the debt limit negotiations is a boon for hedge funds and private equity firms. The paper reports that Cantor walked out of talks with Vice President Joe Biden last month over disagreements about new taxes on investments. Read the full story here.

11:38am | The Washington headquarters of Americans for Tax Reform, the anti-tax group, was briefly evacuated today after a bomb threat. The group’s leader Grover Norquist, has been criticised for pushing Republican lawmakers to reject any debt limit deal that includes new taxes.

11:29am | The “Gang of SIx” chugs along. From CBS Face the Nation yesterday: “We’re still the only bipartisan effort in this town.”

11:01am | Reid spokesman Adam Jentleson emails that the Cox report is “false.“

10:50am | Reid has reportedly called a 6 p.m. meeting the Senate Democratic caucus to discuss his $2.7 trillion plan.

10:48am | We just heard from Senate Majority Leader Reid’s office via Twitter. A spokesman wrote that Reid “does not want short-term deal that could cause credit rating downgrade,” adding that his “2.7T plan stretches through 2012.“

10:45am | In a blog post, Speaker of the House John Boehner called President Barack Obama’s demand for a debt limit increase through the end of 2012 “indefensible ” because he is not ensuring spending is being cut by an equal amount to the borrowing increase. He added that Obama’s plan is a “blank check.”

10:36am | We’re still waiting to hear back on requests for official comment from Reid’s office, though congressional sources are confirming that Reid did agree to a deal with Boehner for a short term debt limit increase, only to be rebuffed by Obama last night. The news was first reported by Cox Radio’s Jamie Dupree.

10:14am | Democrats have said they will not support a balanced budget amendment, and they voted down the GOP “Cut, Cap, and, Balance” plan because it made raising the debt limit contingent on passing one through Congress. It is unclear if they would similarly oppose legislation that just calls for a vote.

10:12am | The report says the language would require a vote on a Constitutional amendment to balance the budget in the next few months.

10:10am | According to POLITICO, House Republicans will insert language requiring a balanced budget amendment in their debt ceiling package.

9:48am | Citing GOP sources, Dupree reports that the plan would have included $1 trillion in cuts, while creating a deficit commission to pursue more changes later this year. Obama has threatened to veto any debt limit increase that doesn’t increase the debt limit through the 2012 election.

9:46am | Cox Radio’s Jamie Dupree is reporting that President Obama rejected a bipartisan short-term debt limit increase. The plan was reportedly agreed to by Boehner, McConnell and Reid. Reid brought it to Obama, who rejected it last night.

9:35am | Are you frustrated by Congressional delays in raising the debt limit? You’re not alone. We recommend reading Norman Ornstein’s article in Foreign Policy titled “Worst. Congress. Ever.”

9:28am | McCarthy did seem open to including some sort of balanced budget amendment in the GOP proposal for show, for the Senate to remove and send back to the House for a final vote. The extra step would add to the amount of time it would take to pass a debt limit increase, and if the House is to go about this route, they have little choice but to release their proposal today for a Wednesday vote.

9:24am | Speaker of the House John Boehner admitted that the “Cut, Cap, and Balance” bill is dead on a call with GOP lawmakers yesterday. For his proposal to pass the Senate he will have to significantly deviate from that bill’s “framework,” something McCarthy did not seem to embrace.

9:20am | McCarthy adds that the GOP plan will not include a balanced budget amendment, but says it may include other balancing measures.

9:18am | GOP Majority Whip Kevin McCarthy (R-CA) tells NBC’s Chuck Todd on “The Daily Rundown that the Republican plan will be similar to the plan they passed last week. “We’re going to use the same framework as “Cut, Cap, and Balance” to come up with something that can pass the Senate,”he said.

8:59am | Among the points of contention are whether the debt limit should be raised through the 2012 election, and if savings from the wars in Iraq and Afghanistan should be counted. In both cases Democrats say yes, while Republicans say no. 

8:53am | Today is shaping up to be another day filled with political posturing, as Democrats and Republicans introduce rival proposals to raise the debt limit.

8:46am | White House Communications Director Dan Pfeiffer writes in a blog post that Republican leaders once opposed a short-term increase in the debt limit before embracing it. The White House position is that the borrowing ceiling must be raised through the end of 2012 in a single vote, or risk economic turmoil.

8:41am | A spokesman for House Majority Leader Eric Cantor emails a statement pushing back on reports that Cantor opposed a short-term increase in the debt limit last week (as the White House and Democrats have contended). Brian Patrick writes:
“To be clear, Speaker Boehner, Leader Cantor and House Republicans have repeatedly said that the best path forward is a long term solution with spending cuts equal to (or greater than) a debt limit increase without tax increases.  However two weeks ago when the White House kept insisting on tax increases, Leader Cantor tried to find a middle ground.  He offered a middle-ground solution with cuts equal to the debt limit increase, to which President Obama responded “don’t call my bluff.

8:37am | Lawmakers and staffers are tired, they tell The Hill newspaper. We doubt anyone has sympathy for their self-imposed sleeplessness.

8:28am | White House Communications Director Dan Pfeiffer and Boehner Spokesman Brad Dayspring found themselves in a Twitter war of words last night. The transcript below:
Pfeiffer: “Three times the GOP has walked away from a deficit deal bc they wouldnt ask wealthy and corps to pay a little more. Too bad for the country.”

Dayspring: “And then he offered a compromise middleground with POTUS 2 weeks ago to avoid default and #Obama got pissed -“Call my bluff” @pfeiffer44″

Pfeiffer: “@BDayspring I don’t think I have ever heard a staffer from any party describe any President of the United States that way publicly.”

Dayspring: “The description was of the reaction to a middle ground compromise offer from Cantor, not a personal critique. @pfeiffer44″

8:11am | Currently no talks are scheduled at the White House today. Speaker of the House John Boehner is expected to release his deficit reduction plan this afternoon. We also expect more details on Senate Majority Leader Harry Reid’s plan today.

8:01am | Congressional leaders are divided over two plans to avoid default, as the time to reach an agreement is best measured in hours, not days, do to strict House and Senate rules. The latest on those plans here.

7:53am | There’s only a 50-50 chance of getting this done by next week. That’s what a senior White House official tells ABC News’ Jake Tapper. “We may be here as we tick down to midnight,” the official said.
 

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