Snapshot: Developments in debt talks | Reuters

Snapshot: Developments in debt talks | Reuters
This is the "progress status:"

Snapshot: Developments in debt talks

8:11pm EDT

WASHINGTON (Reuters) - Here is what is happening on Saturday in negotiations to raise the government's $14.3 trillion debt limit by August 2 and avoid a credit default:

* President Barack Obama holds White House meeting with House of Representatives Speaker John Boehner, Senate Democratic leader Harry Reid, House Democratic leader Nancy Pelosi and Senate Republican leader Mitch McConnell. Obama is trying to get agreement on a way to raise the debt limit after negotiations with Boehner on a broad deficit reduction package collapsed on Friday.

* Boehner, Pelosi, Reid and McConnell meet at the Capitol after the White House meeting. Pelosi tells reporters that lawmakers have to come to agreement soon. "We cannot default," she says, adding that she wants a long-term debt ceiling extension.

* Boehner holds a telephone conference call with Republican House members to discuss status of the talks. One lawmaker on the call says they talked about the potential market reaction if lawmakers fail to report progress before financial markets open in Asia on Monday.

* Republican aides following the White House meeting say lawmakers are putting together a $3 trillion to $4 trillion package of deficit reduction that will follow a two-step process. Lawmakers hope to show progress on the last-ditch effort to raise the debt ceiling by 4 p.m. EDT (2000 GMT) on Sunday, which would be just hours before Asian financial markets open.

* In a written statement following the White House meeting, Boehner says "Congress will forge a responsible path forward." He says leaders are working to find a bipartisan solution to reduce federal spending and to avoid a U.S. credit default.

* McConnell, in a statement, says the bipartisan leadership is committed to crafting new legislation to prevent a U.S. default and to cut spending.

* Congressional staffs are asked to "work together throughout the weekend" to try to craft a deficit reduction bill to clear the way for a debt limit increase, an aide says. The goal is to have legislation ready by Monday for Congress to consider, a senior Senate aide says.

* Financial markets are growing more edgy and U.S. banks and businesses say they are making contingency plans for the possibility of a debt default. If Congress fails to act by the August 2, deadline, when the U.S. government will run out of enough money to pay all its bills, interest rates will jump, the value of the dollar will sink and the effects will ripple through economies around the world.