Lawmakers head for showdown in US debt crisis

President Barack Obama's Democrats and their Republican rivals on Tuesday headed for a showdown over competing debt plans one week before a deadline for averting a potentially disastrous U.S. default.
With the two sides further apart than ever and the threat of a far-reaching U.S. credit downgrade looming, IMF chief Christine Lagarde urged swift resolution of the impasse, warning that failure to reach an agreement would have serious consequences for the world economy.
"The clock is ticking and clearly the issue needs to be resolved immediately," Lagarde told the Council on Foreign Relations think tank.
But there was no compromise in sight after Obama and Republican House of Representatives Speaker John Boehner delivered duelling televised addresses late on Monday and gave no ground in the bitter debate over how to raise the nation's $13.4 trillion debt ceiling by August 2 to prevent an unprecedented default.
The continuing gridlock -- and signs that neither of the competing plans is likely to win bipartisan support -- alarmed investors worldwide. U.S. stocks and the dollar fell while gold hovered near record highs.
But there was no hint of panic as the financial markets held out hope that the stalemate could still be broken.
Boehner on Tuesday kept up efforts to rally support for his plan, which could come up for a vote in the House as early as Wednesday but is in doubt because of resistance from some conservatives in the Republican camp aligned with the Tea Party movement.
"It's reasonable, it's responsible. It can pass the House and it can pass the Senate," Boehner told reporters.
Boehner is pushing a two-stage deficit reduction plan that would start with an initial $1.2 trillion in savings over 10 years. Obama opposes it because it would raise the debt limit for only a few months, something he has said he will not agree to.
The chief Democratic vote counter in the House, Representative Steny Hoyer, said "maybe a few" Democrats would back Boehner's plan. That would boost the bill's chances in what is expected to be a close vote on Wednesday.
Obama's Democrats have presented their one-step plan for $2.7 trillion in deficit reduction over the next decade but with a debt limit hike that would carry through the November 2012 elections, when he is seeking a second term.