WASHINGTON (Reuters) – Republican leaders in Congress said on Tuesday they may stretch out negotiations on raising the debt limit until July, when Washington will be close to defaulting on its obligations.
Senate Republican Leader Mitch McConnell and Eric Cantor, the No. 2 Republican in the House of Representatives, fired the opening shots in what is expected to be a bitter fight with the White House over increasing the U.S. borrowing limit to enable the country to keep paying its debts.
Prolonging negotiations past mid-May when Washington will hit its debt limit could give Republicans more leverage to secure big spending cuts, but it could worry investors as the country runs up against a possible default. The Republicans said they would act before that happened.
In a speech on Wednesday, President Barack Obama will lay out his vision for reducing U.S. deficits to a manageable level through tax increases, spending cuts and changes to expensive healthcare programs for the poor and elderly.