The idea that maybe the federal debt ceiling doesn't have to be raised after all--or at least not right away--is gaining steam in Congress. Earlier this month, it was mostly Republican freshmen who were skeptical of Treasury Secretary Tim Geithner's insistence that the limit had to go up, while House Speaker John Boehner said he wanted the limit raised "sooner rather than later." But Tuesday, less than a week after debt negotiations led by Vice President Joe Biden fell apart, Boehner said that Treasury's deadline of August 2 is "artificial."
Over in the Senate, Minority Whip Jon Kyl has now predicted Treasury will push back the deadline. "I have simply heard that they may be announcing that they can expand this to a later time in August. As I said that wouldn’t be surprising to me." The Hill's Erik Wasson explains that Treasury has to make a $23 billion payment on August 3, but increased revenues might give lawmakers a little more time. Just a little: Treasury spokeswoman Colleen Murray cautioned, "We will provide an update on the debt ceiling outlook at the beginning of July, as we have done at the beginning of each month this year, but it is unlikely that the date will move by more than a day or two--if at all."
Why did talks break down in the first place? Because Democrats were insisting on a $400 billion increase in taxes to go along with the $2.4 trillion in spending cuts, The Wall Street Journal's Naftali Bendavid and Carol E. Lee report. Republicans say they want zero tax hikes.