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Debt Ceiling Showdown: Obama, Boehner Diverge On Demands

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WASHINGTON -- Once again, Speaker John Boehner (R-Ohio) and President Barack Obama find themselves in a standoff over how to raise the nation's debt ceiling.

The scenario is reminiscent of the political fiasco, and near economic calamity, that occurred during the summer of 2011, when congressional Republicans demanded that the debt ceiling not be raised unless it was accompanied by spending cuts of the same or greater magnitude. Only this time, the showdown is taking place amidst a massive debate over the future of U.S. tax policy and the push for major entitlement reform.

White House Press Secretary Jay Carney declined on Wednesday to say whether it was the administration's hope that debt ceiling be resolved in any grand-bargain deal that takes place during the lame-duck session.

But two top Democratic sources confirmed to The Huffington Post that the president, in private meetings and conversations, has made it abundantly clear to Boehner that he wants the debt ceiling raised as part of the current package being negotiated. In comments to reporters on Thursday, Senate Majority Leader Harry Reid (D-Nev.) echoed this position.

"We are not idiots," A Senate Democratic aide said, speaking anonymously to (colorfully) outline the caucus' thinking. "And we are not going to sign a deal to get past a fiscal cliff and then turn around and have Republicans force us into another deal two months later."

To what extent Boehner wants to have another fight is not entirely clear. He likely realizes that it would be difficult to corral his caucus for more than one major vote related to budget or spending. He also likely recognizes the hit congressional Republicans took in public polling following the July 2011 debt ceiling standoff.

But in comments on Thursday, the speaker dipped back into the rhetoric that he and other conservatives used during that last debt-ceiling showdown.

"Any increase in the debt limit has to be accompanied by spending reductions that meet or exceed it," he said. Aides to the speaker did not return a request for comment as to whether a debt ceiling deal could or should be part of a fiscal cliff resolution.

Should the debt ceiling issue remain unresolved heading into the next Congress, there is one additional option that Democrats could explore. There is a legal school of thought that holds the debt ceiling to be inherently unconstitutional, calling it a violation of the 14th Amendment, which declares that the validity of the public debt "shall not be questioned."

The White House scoffed at this argument during the summer of 2011, saying privately that it lacked a legitimate legal bearing and would do little to instill confidence among those buying U.S. debt. That could be so. But as a political matter, it's a tool that Democrats currently say they are willing to revisit.

"If Republicans insist on trying to use it as leverage again, then you can see more talk about it," said one Senate Democratic aide, who was echoed by a Democratic aide on the House side.

Estimates for when the debt limit will be reached change over time. But in late October, the Treasury speculated that the moment could come by late 2012. The likelihood is that the matter could be put off for several weeks, if not months, through various accounting measures.

The debt ceiling is a congressional composed cap on the total amount of debt that the government can accrue. Critics contend that since Congress already has the authority to spend, it does not need an additional rule to cap its spending. Failing to raise the debt ceiling is the only real way that the United States Treasury will default on its obligations.

UPDATE: 1:50 p.m. -- At his daily briefing on Thursday, Carney said it was "deeply irresponsible" that Boehner is again calling for tying a debt ceiling increase to spending cuts.

Jennifer Bendery contributed reporting.

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