Pat Dollard

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That’s right folks… there has been no budget or plan offered by the Democrats. This will be the first one. Hard to compromise when the other side is not contributing any plan at all.

WSJ Online:

Senate Democratic Majority Leader Harry Reid is working on a backup plan to increase the debt ceiling by $2.5 trillion and cut spending by the same amount in the event there is no further progress in talks between Democratic and Republican congressional leaders, a Senate Democratic aide said Sunday.

The plan would have no new tax increases, the aide said.

The $2.5 trillion increase in the debt limit would be enough to support federal spending through 2012, avoiding the need to revisit the issue next year.

The Senate Democratic leader could brief some members of his caucus on the plan later Sunday evening, the aide said. More details of what would constitute the spending reductions would not be available until after that briefing occurred.

If Mr. Reid moved forward with the plan, it would be a clear signal that long-running negotiations between Democrats and Republicans had proved unsuccessful. Senate Democrats would hope to move the proposal through the Senate and then hand it the Republican-controlled House as their solution to the need to increase the debt ceiling.

It isn’t clear whether a Reid plan would win support from Senate Republicans. At least a handful of GOP senators would have to vote for it in order for the Senate to approve it.

The $14.29 trillion debt ceiling needs to be raised by Aug. 2, just nine days away, otherwise the Treasury Department has warned the U.S. may no longer be able to pay all of its bills.

Congressional leaders have been locked at an impasse since Saturday over the structure of a two-step debt-ceiling increase that would raise the borrowing limit in two tranches—one in August and the second at the beginning of next year.

Meanwhile, Mr. Reid and House Minority Leader Nancy Pelosi (D., Calif.) were likely to meet with President Barack Obama at the White House at 6 p.m. EDT.

The proposal by Mr. Reid came as House Speaker John Boehner (R., Ohio) was briefing with his Republican members by conference call on the latest debt-ceiling developments. Congressional leaders were trying to reach a deal to cut the budget deficit and raise the government’s debt limit but remained at an impasse just as Asian financial markets were poised to open. Mr. Boehner’s call was under way shortly before 5 p.m., and details of the discussions weren’t immediately available.

Treasury Secretary Timothy Geithner said the two-stage proposal being pushed by Mr. Boehner that would lift the federal debt ceiling through the end of the year and then again after another deficit debate was a nonstarter because it wouldn’t win enough Democratic votes to pass Congress. Mr. Geithner said leaders needed to find a way to reach the framework of an agreement that would give the markets confidence by Sunday night.

“They need to get this process moving in the House Monday night. To achieve that deadline they need to have a framework that they know with complete confidence that will pass both houses of Congress, that is acceptable to the president and that should happen today,” Mr. Geithner said in an interview on ABC’s “This Week.”

“The eyes of the world are on us,” Mr. Geithner said. In early Asia trading, the dollar was trading down against the yen and the Swiss franc.

Mr. Boehner said in an interview on “Fox News Sunday” that if he can’t reach an agreement with House Democrats on a deal, then Republicans would go it alone. “I’m trying to find a common ground that’s doable in the time we have remaining,” Mr. Boehner said.