Default risk widens rift within GOP

Presidential candidate Michele Bachmann, with fellow House Republican Steve King of Iowa, says she will vote to raise the debt limit only as part of a deal to repeal the healthcare overhaul. (Win McNamee / Getty Images / July 13, 2011)

Republicans are of several minds as experts warn that a debt limit deal must be reached soon.

By Kathleen Hennessey and Peter Nicholas,
LA Times Washington Bureau
6:30 PM PDT, July 13, 2011

Reporting from Washington

The once-vaunted unity of congressional Republicans has become a distant memory, crumbling under the pressure of the deadline to raise the government's credit limit.

As the internal fissures widened and another White House meeting ended inconclusively, the economic stakes rose. Moody's Investors Services said Wednesday it had placed the U.S. government's AAA bond rating on review for possible downgrade because of the possibility that the debt limit "will not be raised on a timely basis, leading to a default on U.S. Treasury debt obligations."

Federal Reserve Chairman Ben S. Bernanke warned in congressional testimony that failure to raise the government's debt limit by Aug. 2 would be a "huge financial calamity."

And Senate Minority Leader Mitch McConnell (R-Ky.) issued a political warning that the party risked losing the next election if Republicans persisted on their current path.

(More here.)