WASHINGTON (AP) -- The top Republican in the Senate proposed on Tuesday giving President Barack Obama sweeping new power to increase the nation's debt limit to avoid a first-ever default on U.S. obligations.
Minority Leader Mitch McConnell, R-Ky., offered a new plan to allow the president to demand up to $2.4 trillion in new borrowing authority by the summer of next year in three separate submissions. Those increases would automatically take effect unless both the Republican House and the Democratic Senate enacted legislation disapproving them.
Obama would be able to veto such legislation, giving him power to muscle through the debt increases.
The GOP plan would require that Obama submit spending cuts along with his borrowing requests. But unlike the increase in the debt limit, they wouldn't automatically take effect.
The new mechanism would take the place of the White House debt negotiations between congressional leaders and Obama. Those talks over spending cuts and tax increases have grown increasingly acrimonious.
McConnell offered the plan just a couple of hours before he went to the White House for the third round of budget talks in as many days. The two sides are increasingly at odds over Democratic demands for revenue increases to accompany the $4 trillion-plus in spending cuts demanded by Republicans as the price for maintaining the government's ability to borrow to meet its obligations.
Tuesday's negotiating session began shortly before 4 p.m. EDT.
McConnell said he offered the unusual proposal because it had become clear the negotiations weren't going anywhere.
"I had hoped all year long that the opportunity presented by his request of us to raises the debt ceiling would generate a bipartisan agreement that would begin to get our house in order," McConnell said. "I still hope it will. But we're certainly not going to send a signal to the markets and the American people that default is an option."
Treasury Secretary Timothy Geithner and private market experts have issued dire warnings of the effect a potential default would have on the still-struggling economy, including a possible downgrade in the government's AAA bond rating, higher interest rates and panic in the markets.
"Let me be clear: the debt limit will be raised," Geithner told a symposium Tuesday. "Failure is not an option. Both sides understand what is at stake and will come to an agreement."
Obama himself warned in a CBS News interview that he couldn't guarantee that Social Security payments would go out as scheduled on Aug. 3.
An aide to House Speaker John Boehner, R-Ohio, said Boehner shares McConnell's concerns about the lack of progress in the talks. A spokesman for House Majority Leader Eric Cantor, R-Va., said Cantor feels that the McConnell proposal could be helpful.
Senate Majority Leader Harry Reid, D-Nev., said he had spoken briefly to McConnell about the idea and said he would consider it.
The sweeping new power would only be in effect through the remainder of Obama's term.
McConnell's plan would permit an immediate increase in the debt limit of $100 billion while Congress debates whether to disapprove of it.
McConnell's proposal came after a days of partisan sparring and a particularly poisonous exchange of volleys Tuesday morning.
McConnell blasted the White House for overstating its willingness to cut spending.
"The savings they were supposedly willing to support were at best smoke and mirrors," McConnell said.
Boehner went on the attack as well, telling reporters: "This debt limit increase is (Obama's) problem and I think it's time for him to lead by putting his plan on the table -- something that Congress can pass. Where is the president's plan? When's he going to lay his cards on the table?"
Responding to Boehner's comment, Carney pointed out that it is Congress' responsibility to vote for an increase in the debt ceiling.
"The president doesn't have a vote in this," he said. "It's Congress that has to act." He said Obama will be in office for at least another 18 months, and "the American people expect Congress to work with him."
Associated Press writers Ben Feller, Julie Pace and Erica Werner contributed to this report.