Boehner and the Republicans remain in Charge...

Looks like the Republicans and Boehner have the upper hand in these negotiations...IF presented with a short term/two step plan Obama will HAVE to sign it...

Deficit Talks in 'Deadlock' Over Timing, Taxes

Published July 24, 2011 | FoxNews.com

The White House is on a collision course with Congress over the structure of a possible debt deal, urging lawmakers to extend Washington's borrowing power through the next election despite GOP threats to force another showdown vote next year.

The timetable for a deal to raise the debt ceiling is one of the major sticking points as lawmakers try to cobble together a proposal before the financial markets open.

House Speaker John Boehner told "Fox News Sunday," that "it's just not physically possible to do all of this in one step." He's pushing for a two-stage process, one which presumably would involve a short-term increase in the debt ceiling now along with a modest package of spending cuts, and another vote next year.

The White House is not fundamentally opposed to dealing with the problem in two steps. But Obama administration officials made clear Sunday that they do not want the second phase to entail another epic debt-ceiling fight months before the election.

"The idea that we're going to spend another seven months lifting the cloud of default from the American economy, it seems irresponsible," Treasury Secretary Tim Geithner told "Fox News Sunday." "There's no reason why we have to do it that way."

With Republicans and Democrats at odds over the timetable of votes, a senior Senate Democratic leadership aide told Fox News that talks on Sunday "hit a deadlock."

"Boehner is sticking with his short-term plan even though Democrats have rejected it and (the) president says he will veto it," the aide said. Another source said revenue -- as in tax hikes -- continues to be the big dividing issue.

Both sides, once again, are taking a gamble.

The Obama administration says Congress has until Aug. 2 to raise the debt cap or face default, and the unsteady negotiations have brought Washington precariously close to wreaking havoc on the financial markets, not to mention the country's credit rating.

Boehner, after splitting off from White House talks on Friday, is trying to craft a new plan with congressional leaders and is looking to outline a framework later in the day Sunday. He said he wants to get bipartisan support but is willing to move forward without Democrats if necessary.

In doing so, Republicans would have to bet that at least a handful of Democrats would ultimately accept their plan in the Senate and that President Obama would have no choice but to sign it.

Sen. Tom Coburn, R-Okla., said as much on NBC's "Meet the Press," when asked about the White House threat to veto any short-term plan that doesn't extend U.S. borrowing power into 2013.

"That's a ridiculous position, because that's what he's going to get presented with," Coburn said. "I think they won't have any choice."

Republicans are still pushing to convince Democrats to accept a two-tiered approach tailored to their liking.

"There will be a two-stage process," Boehner told "Fox News Sunday." "I know the president is worried about his next election. But my God, shouldn't he be worried about the country?"

Though Boehner is keeping details close to the vest, Senate Republican Whip Jon Kyl offered a possible approach. He told CBS' "Face the Nation" that Boehner could propose a plan to raise the debt ceiling through the end of 2011. He said Congress can "surely extend it for five or six months," and then consider deeper deficit-reduction proposals in the second phase.

"If we can reduce spending by $1 trillion, then we can extend the debt ceiling $1 trillion worth. And that would take us at least through the end of this year," he said.

A Republican conference call is scheduled for late Sunday afternoon.

But Democrats are putting their foot down over any plan that effectively schedules another chaotic debate over the debt ceiling in early 2012.

White House Chief of Staff Bill Daley said Sunday that Obama would be "fine" with a two-step process, but not one where the second part "lets the political system once again show its dysfunction" -- suggesting the White House wants the debt-ceiling issue taken care of first, leaving deficit-reduction to be dealt with over two stages.

Senate Democratic Whip Dick Durbin also ridiculed "this notion that we're going to replay this movie in four or five months."