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konrad yakabuski

The perilous political standoff that has left the United States at risk of defaulting on its debt has come down to a raw battle for public opinion with duelling prime-time appeals by the President and the top Republican in Congress.

Barack Obama and House of Representatives Speaker John Boehner went before the nation in successive televised addresses to pitch vastly divergent visions of the country and starkly contrasting plans to allow the U.S. Treasury to continue borrowing beyond next week and avoid the potential for chaos in financial markets.

"Republican House members have essentially said the only way they'll vote to prevent America's first-ever default is if the rest of us agree to their deep-spending-cuts-only approach," Mr. Obama charged. "It is a dangerous game we've never played before and we can't afford to play it now."

The strident tone of the President's remarks reflects the uncommon elevation of the stakes involved in raising the Treasury's $14.3-trillion (U.S.) debt ceiling by the Aug. 2 deadline.

Increasing the borrowing limit is typically a routine, if occasionally protracted, affair. But the addition of dozens of Tea Party Republicans in Congress since Mr. Obama's 2008 election, coupled with record deficits in the recession's wake, has made this debt ceiling stare down the diciest yet.

Mr. Boehner derided the President's call for a "balanced approach" to deficit reduction, involving spending cuts and tax increases on wealthier Americans.

In Washington-speak, that means "we spend more, you pay more," Mr. Boehner deadpanned. "The sad truth is that the President wanted a blank cheque six months ago, and he wants a blank cheque today. That is just not going to happen."

Mr. Obama did not openly abandon his hopes of forging a "grand bargain" with Republicans that would set the country on a sustainable fiscal trajectory by slashing the deficit by $4-trillion over 10 years. But his endorsement of a more modest plan put forward Monday by Senate Democrats signals the White House has lowered its sights.

"It's a concession to reality," Larry Sabato, director of the University of Virginia's Center for Politics, offered in an interview.

Mr. Obama is now backing a plan conceived by Harry Reid, the leader in the Democratic-controlled Senate, to cut $2.7-trillion from spending over 10 years and raise the Treasury's so-called debt ceiling enough to permit continued government borrowing until after the 2012 presidential election.

"That's a lowering of expectations by the President," Mr. Sabato explained. "His goal at this late stage is to have just one vote in Congress so this issue doesn't continue to dominate politics for next six or eight months."

By contrast, the proposal Mr. Boehner is pushing to raise the debt ceiling in two stages would keep debt discussions on the political front burner. Mr. Obama would have to seek approval from Congress to raise the borrowing limit again next year, exposing him to another potentially damaging political stalemate during election season.

It is unlikely either the Reid proposal or the Boehner plan could pass both the House and Senate in its present form, leaving the debt ceiling impasse no closer to resolution with only a week left before the deadline by which Congress must act.

Determining which, if either, of the rival plans prevails could depend on how Americans rate the speeches by Mr. Obama and the Speaker.

Mr. Obama sought to harness voter frustration with bickering in Washington, saying: "The American people may have voted for divided government, but they didn't vote for dysfunctional government."

While the Reid plan is a far less ambitious proposal than a grand debt bargain that would force wealthier Americans to pay more taxes, it would allow Mr. Obama to save face and claim to be acting in the interest of the country to preserve its financial integrity.

"Even if the grand bargain dies, even if he gets no tax increases, he still wins because he looks presidential," said Wendy Schiller, an American politics professor at Brown University in Providence, R.I.

The Reid plan proposes no changes to the most costly social programs - Medicare, Medicaid and Social Security. Scores of Democrats in both chambers had been livid with Mr. Obama for offering to put such sacred cows on the table in earlier negotiations with Mr. Boehner.

Those talks broke down for a second time on Friday when the Speaker balked at Mr. Obama's request for $400-billion more in tax increases, on top of the $800-billion revenue increase that was first being discussed.

In his rebuttal speech on Monday, Mr. Boehner rejected the Reid proposal as "full of phony accounting and Washington gimmicks."

Under Mr. Boehner's plan, Congress would vote to increase the debt ceiling by $1-trillion now in exchange for passing $1.2-trillion in cuts. A 12-member congressional committee would then come up with a plan by this fall to cut an additional $1.8-trillion. If that package of cuts passes Congress, Mr. Obama could then seek another debt ceiling increase in February.

Mr. Obama urged Americans not to fall for it.

"We know what to expect six months from now: The House will once again refuse to prevent default unless the rest of us accept their cuts-only approach," the President said. "We can't allow the American people to become collateral damage to Washington's political warfare."

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