Pelosi says leaders looking at two-tiered debt approach

House Minority Leader Nancy Pelosi (D-Calif.) said Saturday night that congressional leaders are considering a two-tiered approach to raising the debt ceiling and reducing the nation’s long-term budget deficit.

Pelosi reiterated that she backs “a long-term extension” of the $14.3 trillion debt limit, putting her in line with the demands of President Obama and Senate Majority Leader Harry Reid (D-Nev.).

Congressional leaders met for just under an hour in House Speaker John Boehner’s (R-Ohio) office late Saturday, trying to forge an agreement to slash government spending and raise the debt ceiling by the Aug. 2 deadline.

Reid, however, released a statement that was less than optimistic about reaching an agreement on the timeframe of a deal.

"I hope that Speaker Boehner and Leader McConnell will reconsider their intransigence," Reid said in his statement. "Their unwillingness to compromise is pushing us to the brink of a default on the full faith and credit of the United States. We have run out of time for politics. Now is the time for cooperation."

Boehner told House Republicans earlier in the day that he wanted to present a plan by Sunday afternoon to avoid rattling the Asian markets.

Aides have said the Speaker continues to insist that the size of spending cuts exceed the size of any increase in the debt limit, meaning that lawmakers would need to agree on more than $2.4 trillion in cuts to extend federal borrowing beyond 2012.

Pelosi said the leaders are looking at a two-tiered approach, which would likely combine immediate spending cuts while creating a process for Congress to enact entitlement and tax reforms over the next several months. She hinted, however, that the revenue would come in the second “tier” of the process.

“One option is to do something in two tiers, and I don’t think we can accomplish what we need to do in deficit reduction without revenues,” Pelosi said.

Asked if the revenues would come in the second tier, she replied: “It would have to be if we are going to go into … what we need to do is to greatly reduce the deficit. But it is not over yet.”

The office of Speaker Boehner also said late Saturday that Congress will have to resort to a two-vote approach to raise the debt-ceiling and prevent a government default.

"The Democrats who run Washington have refused to offer a plan," Boehner spokesman Michael Steel said in a statement. "Now, as a result, a two-step process is inevitable." 

Democratic Caucus Chairman John Larson (Conn.) suggested Friday, however, that such a plan wouldn't win the Democratic support needed to pass through the lower chamber.

"That may be something that Speaker Boehner feels that he can get 218 Republican votes on," Larson warned.

Pelosi said congressional leaders are still working but that no further meetings were scheduled as of Saturday night.

“The only thing is that it has to happen,” she said, referring to an increase in the debt ceiling. “We cannot default, and I want a long-term extension.”

The former Speaker also rebutted claims that Boehner had shoved aside Obama by convening meetings at the Capitol without White House officials. The Speaker broke off negotiations with Obama on a broad deficit reduction deal on Friday, citing an impasse over taxes. Little progress was reported in a short meeting the president convened at the White House on Saturday morning.

“The president involved? He’s the center of it all,” Pelosi said in a response to a question about Obama’s involvement.

Boehner, Reid and Senate GOP Leader Mitch McConnell (Ky.) all left the Capitol on Saturday without commenting substantively to reporters.

Boehner is expected to appear on “Fox News Sunday” in the morning.

Molly K. Hooper contributed.

This story was originally posted July 23 at 8:09 pm and has been updated.