By NBC's Libby Leist: At a press conference this morning at the Capitol, Senator Chuck Schumer (D-N.Y.) told reporters that Senate Minority Leader Mitch McConnell's "backup" plan may be a way out of the deficit standoff, with some spending cuts added in that would help pick up Republican votes.
Schumer said President Obama still wants a bigger deal but that House Majority Leader Eric Cantor is blocking compromise.
"There's really only one person who has not made any concessions of all the eight, nine [people] in that room, and that is Majority Leader Cantor. He is basically standing in the way and it's a shame."
Schumer added later, "If Eric Cantor decides everything I fear we'll be in default."
On the McConnell plan, Schumer revealed that Senate Leaders Harry Reid and McConnell are working on a proposal of spending cuts that could be added to the plan that would make it more appealing to Republicans, especially in the House. McConnell's plan as it stands now would allow the President to raise the debt ceiling three times on his own before the 2012 election without any guaranteed spending cuts.
"We believe we have to avoid default, obviously, but we also have to reduce the deficit and lower the debt and so we would like to see even if we can't get a grand deal, that some real cuts be added to Senator McConnell's proposal and perhaps Senator McConnell's proposal be modified."
Schumer ticked through best to worst case scenarios. He said the best case is a large deal negotiated at the White House. Second best is to avoid default by adding some spending cuts to the McConnell plan. Third would be to avoid default without any cuts. Last would be default.
Schumer held the press conference with fellow Democrats Mark Begich, Chris Coons and Ben Cardin to warn of the dangers of default. Standing next to two giant charts the senators illustrated what they called the "dark and difficult" choices that the Treasury will have to make if the debt ceiling is not raised.
Schumer said that next month after Social Security, Medicare, Medicaid, military payments and interest in Treasury securities is paid there would be large parts of our government at risk of losing funds.
He listed areas like: education, labor, justice, energy, health, food nutrition, IRS payments, and unemployment insurance.