Analysis: Is Financial Catastrophe Looming For U.S.?

House Speaker John Boehner summoned rank-and-file conservative lawmakers in a Sunday-afternoon conference call to be ready for compromise but the day ended with bipartisan talks stalled.

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MARY LOUISE KELLY, Host:

And we've also got NPR's Cokie Roberts with us this morning, to give us some analysis on all this. Good morning Cokie.

COKIE ROBERTS: Hi, how are you, Mary Louise?

LOUISE KELLY: I'm well, thank you. So let me start with this development that Andrea was just reporting there - Republicans and Democrats now working on their own, separate plans. Is there any way to see this as progress?

ROBERTS: Yes there is because these plans have essential, you know, the - timelines, cuts - these are things you can compromise. And this is not something that you can't - you can't come to an agreement on, like a constitutional amendment on a balanced budget, where one house wants it and the other house doesn't.

So I think that this is something that is going to be hard because the White House is saying it doesn't want a short-term level - lifting of the debt ceiling. But it's something where you can get to an agreement.

LOUISE KELLY: Give us a little bit of a reality check here - big-picture reality check. We have been hearing for weeks that catastrophe looms, that we're on the brink of disaster. We're now hearing, maybe something that maybe represents progress. Are we on the brink of disaster, still?

ROBERTS: This is serious. And you are hearing from all of the leaders that it's serious. Look, we've had big fights over the debt ceiling for decades. I've covered a bunch of them. But this is different because the economy is so fragile, and because the economy is so global. And I'm hearing a certain element of waiting for the markets to weigh in, to show Congress that it has to get serious. You know, that happened with that Troubled Asset Plan, TARP. The first time it didn't pass Congress, the stock market fell 700 points. It had the affect of concentrating the mind. So far that hasn't happened here, and so congressional leaders in the White House are still going at it.

But there is a strong sense, at both ends of Pennsylvania Avenue, that this is something that they really do have to get done by August 2nd.

LOUISE KELLY: Yeah, and we're hearing talk that maybe the credit-rating agencies may lower - may lower the rating, whether or not they come up with an agreement at this point.

ROBERTS: And that, of course, would have the affect of costing everybody more money.

LOUISE KELLY: Talk to me a little bit, Cokie, about the group in Congress that seems most opposed to a compromise - that would be the Republican freshman class in the House. They seem to be getting - if not most, certainly a lot of the blame for the current impasse. Is that valid, for them to be getting that much blame?

ROBERTS: Well, the Republicans would say no, that the White House is equally to blame for not compromising. But look, these freshman Republicans have gotten a great deal since they've been elected. They have, over and over again, been able to get spending cuts enacted, and that's what they think they've been elected to do. I mean, you - Andrea was just talking about how they think the American people are with them. And the truth is, their own voters do seem to be with them, whether the general polling is for the Republican views here or not. In their own districts, among their own Republican voters, they're hearing stick with it, stay with it.

Now, their leaders understand that some of this could work very much against them. And they have had the unpleasant experience in the past, of having Democrats say oh, those Republicans are trying to take away Social Security, trying to take away Medicare. And so the leaders are somewhat wary. And that's why they keep saying to the White House, you know, tell us what your cuts are.

Now the president's not going to do that because that, he is going to leave to the United States Congress.

LOUISE KELLY: Mm-hmm. Well, so where are we, Cokie, big picture again? I mean, let's assume - let's take the Republican and Democratic leaders at their words, and assume that they are going to figure something out. August 2nd comes and goes, the world does not end. What then?

ROBERTS: Then - then what you have is the normal legislative process, and they slug it out in the spending bills - one after another. And each one becomes a very difficult thing to get done. But that is exactly where Congress normally is, and then the drama ends until they have to raise the debt ceiling again.

LOUISE KELLY: All right. Thank you, Cokie.

That's NPR's Cokie Roberts. We've been talking with her, and also with NPR's Andrea Seabrook, getting the latest on these talks to try to resolve the debt crisis.

You're listening to MORNING EDITION from NPR News.

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