Politics, ideology overshadow debt limit talks

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They will also promote a deficit-reduction plan that relies on permanent spending curbs, lower taxes and scaled-back government health programs as they try to wrestle control of the White House and the Senate from Democrats.

Obama and his Democrats will lay out a rival vision of deficit reduction through a mix of lower spending and tax increases for the wealthy, arguing that getting the country's fiscal house in order does not require wholesale cuts to popular programs.

The battle is likely to stretch out for months and could bring the world's most powerful economy to the brink of default -- a prospect that would have far more serious implications for investors and the U.S. economy than the government shutdown that was narrowly averted less than two weeks ago with a last-minute deal on spending reductions.

"Shutting down the government is like a really bad stomach ache. The debt limit is like a heart attack," said Norm Ornstein, a congressional analyst at the conservative American Enterprise Institute.

POSTPONING D-DAY

Unlike nearly every other advanced economy, the United States requires legislative approval for any increase in the amount of money it can borrow. Congress has voted to raise the debt limit 10 times since 2001 as annual budget deficits brought on by wars, tax cuts and the worst recession since the 1930s pushed the country deeper into debt.

The Treasury Department estimates it will hit its current limit of $14.294 trillion by May 16, though it could use a variety of tricks to stave off default until early July.

Some observers think Treasury could postpone a default for several more weeks beyond that.

Whatever the final deadline, Congress isn't likely to act much before then.