Grand Bargain Deal Failure Would Set Up 2012 Debt Showdown

A Republican demand that an increase in the U.S. debt limit be matched by spending reductions may do more than force painful cuts. It could mean another vote on the borrowing cap at the height of the 2012 election campaign.

With hopes fading for a grand bargain to rein in the debt, Vice President Joe Biden said he thinks a bipartisan group of lawmakers he’s leading in talks can agree on a $1 trillion deficit-reduction package to win enough votes to raise the $14.3 trillion debt ceiling by August. Yet unless he can get Republicans to agree to raise the debt ceiling beyond that, it won’t be enough to get past the election, budget experts say.