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US now faces two debt ceiling deadlines: Asian financial markets and possible default

As the clock ticks toward government default, House Speaker John Boehner says he’ll have a plan by the end of the day Sunday. Asian financial markets and Wall Street are watching closely.

By Staff writer / July 24, 2011

President Obama and House Speaker John Boehner met for the last time on Saturday. There's still no resolution to the debt ceiling crisis, which faces an August 2 default deadline and increasingly nervous financial markets in the US and abroad.

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The political turmoil over raising the nation’s debt ceiling now comes down to two deadlines: The opening of Asian financial markets later today (Sunday at 6 pm east coast time) and eight days from now when the Treasury Department says the United States could default on its financial obligations.

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Wall Street is watching closely, and I see you checking your portfolio there.

RECOMMENDED: Five ways US default would hit your pocketbook

Metaphors abound.

In his attempts to craft a spending cut/taxes compromise with Republican House Speaker John Boehner, President Obama says he’s been “left at the altar” twice. Boehner likens working with the White House to negotiating with Jell-O. (About food, Obama uses an “eat your peas” warning for what’s needed by both sides.)

For Treasury Secretary Timothy Geithner, the imagery is aeronautical.

"We're running out of runway. We're almost at the edge,” he said on Fox News Sunday. “I never thought they would take it this close to the edge.”

The precipice may loom (and any pilot knows that the kind of heat and humidity in Washington these days requires even more runway to get airborne), but the talks continue and Boehner says he’ll have a plan later today – in time (maybe) to head off bad news in Asia.

In any case, he says, “My last offer is still out there.” That’s a reference to major budget cuts and $800 billion in new tax revenues, which Boehner says Obama then tried to up to $1.2 trillion in revenues.

“I've never taken my last offer off the table," Boehner told Fox News. Still, he added, “It may be pretty hard to put Humpty Dumpty back together again.”

The thrust of much of the reporting now is that the serious talk is among lawmakers of both parties – pretty much excluding the White House.

One exception: ABC’s senior political correspondent Jonathan Karl blogs that “Speaker Boehner and President Obama are once again having back-channel talks on a large-scale deficit reduction plan that would include cuts to entitlement programs and increases in tax revenues.”

“It now looks like the original framework is back in play – a deal with some $3 trillion in spending cuts and $800 billion in additional tax revenue,” Karl writes. “One source described the talks as Boehner and the president ‘footsie’ because the talks are indirect, and they are happening even as Boehner and the other Congressional leaders are attempting to negotiate a Plan B.”

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