Change of mind: White House open to short-term debt extension

The White House shifted gears today and signaled that President Barack Obama could support a short-term extension of the US borrowing limits as long as it was part of a broader long-term deficit reduction deal.

The switch came a day after the so-called Gang of Six senators produced an ambitious deficit reduction plan that Obama latched onto as a way to help break through an impasse in an increasingly grim standoff that has threatened the United States' top-notch credit rating.

"We believe a short-term extension absent an agreement to a larger deal is unacceptable," White House press secretary Jay Carney told reporters. "If both sides agree to something significant, we will support the measures needed to finalize details."

Obama has previously said he would not sign a short-term extension of the US borrowing limit.

Carney's comments appeared to reflect the fact that time is running out for Congress to pass a deficit reduction deal by an Aug. 2 deadline to avoid a debt default. Congress must approve an increase in the $14.3 trillion US debt ceiling by then or the government will run out of money to pay its bills. Republicans and Democrats agree that spending cuts should accompany a debt-limit increase to tame mounting debt but have been unable to agree on the details.

White House talks on a comprehensive deficit-reduction deal stalled over tax increases, which Republicans still rule out.Obama will meet with the Democratic leadership of the Senate and the House of Representatives today to discuss progress on the debt negotiations, the White House said.