07/29/2011 02:39 pm ET Updated Sep 28, 2011

Senate Debt Bill Poised To Take U.S. To Edge Of Default

WASHINGTON -- Senate Democrats think they see a path to raising the nation's debt ceiling, but it will literally take the country down to the wire -- if Republicans go along.

Leaders in the upper chamber are flatly rejecting House Speaker John Boehner's third attempt at a debt measure, arguing that the Ohio Republican has gone so far to the right to win his own members that not a single Democrat can vote for it.

The Boehner plan would require a balanced budget amendment to the U.S. Constitution before raising the $14.3 trillion debt cap for more than a short time. Since amending the Constitution requires a two-thirds majority, it's guaranteed to fail and guarantees default, Sen. Chuck Schumer (D-N.Y.) said.

"Speaker Boehner should just give it up," Schumer said. "The Boehner proposal says we won't default now, but we promise you we will default by January. It is an absurd, absurd proposition."

What Democrats say is not an absurd proposition is moving ahead on some version of the plan put forward this week by Senate Majority Leader Harry Reid (D-Nev.) to cut some $2.2 trillion over 10 years.

Reid told reporters that a number of Republicans had spoken to him to express interest, and Reid called on Senate Minority Leader Mitch McConnell (R-Ky.) to come forward and figure out how to make the Democratic proposal acceptable to more Republicans by Friday.

"I've asked my friend Sen. McConnell to meet with me to try to work this out. And I'm confident he will," Reid said.

Reid was not willing, however, to say what he would change in his version of the bill, except to repeat that Democrats will not accept a short-term fix.

Democrats argue they have already given in to GOP demands that the savings equal the size of the debt hike and not involve raising any revenue. But there are various parts of other deficit-cutting schemes that have been presented this year that they might accept.

Democrats leaving a party caucus meeting shortly before Reid spoke to reporters believed that the GOP would end up embracing a Senate-led deal.

"I think the end game is a McConnell-Reid compromise," said Sen. Sherrod Brown (D-Ohio). "Then the House goes along with it because they get enough pressure from the business community and Wall Street.

That pressure would be all but guaranteed to come because of the timeline that now exists -- and which takes the process right until the Aug. 2 deadline by which the Treasury Department has warned the United States will start the process of defaulting.

Because of Senate parliamentary rules, if Reid gets the legislation rolling at some point Friday, as he promised in his news conference, then the Senate would have to hold a series of votes that could not finish until Tuesday unless all the Republicans relented. It will be hard enough, as Reid suggested, just to get the few GOP senators needed to advance through a 60-vote filibuster threshold.

Schumer said another compromise or two and the gravity of the situation should make it possible for Republicans get on board.

"Since it will be the last train leaving the station, we expect Senate Republicans will give it a long, careful look," Schumer said.

One compromise that appears to be off the table is the idea of writing a trigger into the law that would require certain steps to lower the deficit if certain targets were not met. But neither side has budged on what it wants the trigger to require. Republicans want it to mandate deeper budget cuts, while Democrats want more cuts and taxes.

Reid seemed to hint he was raising the level of cuts in his proposal, saying to reporters it was a $2.4 trillion plan -- $200 billion more than the measure scored earlier this week by the Congressional Budget Office.

Whatever the compromise, it has to happen quickly, and Schumer repeated the position that it's up to McConnell to suggest a couple of ways to tweak the Reid bill.

"Sen. Reid has said his door in open. We'd like somebody to walk in," Schumer said.