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Reid and McConnell work on a fail-safe debt limit plan

By NBC's Libby Leist:  As deficit talks continued for a fifth night at the White House, details are emerging about negotiations between Harry Reid and Mitch McConnell on a backup plan to raise the debt ceiling and avoid default. The plan is being crafted in anticipation that White House talks are going nowhere.

Reid told reporters this afternoon that he and McConnell are working off the plan McConnell proposed on Tuesday that would allow the President to raise the debt ceiling in three increments through the 2012 election.

"We don't have it worked out yet, but it's something that we're looking to. Hopefully, we can come up with this big, robust deal that we've been trying to get, but until we do that, we're going to have to look at other alternatives.  And this is one of them," Reid said. He noted that White House officials are now participating in their talks.

According to both Democrat and Republican aides, the McConnell plan stands to change by adding guaranteed spending cuts to the mix. The political benefits are two-fold: Including spending cuts upfront presumably would attract more Republican support while also giving Democrats the ability to say they've done something about the deficit.

Aides say the leaders are discussing attaching up to $1.5 trillion in short to medium-term cuts that were found through the Biden talks and in the White House negotiations. They say its not clear how those cuts will fold into McConnell's original plan that requires the president to propose cuts in three batches totaling more than $2.5 trillion. Reid is also not in favor of having three different debt ceiling votes over the next year.

In addition, Senator Reid has proposed establishing a bipartisan Congressional committee (they say it is not a commission) comprised of 8-12 members from the House and Senate to come up with yet more cuts that may include entitlements. The committee recommendations would go to the floor for a straight up or down vote without an amendment process. One Republican Senator told NBC News the committee might be required to report by the end of this year.

*** UPDATE:  McConnell spoke on the Hugh Hewitt show tonight after the White House meeting. He called the talks "a little more cordial" today but he did not sound optimistic about any breakthroughs. 

"Its going to be very difficult to get this president to do the kind of spending reduction package that we really need without tax increases. He will only go so far without insisting on tax increases in order to get a bigger package," McConnell said.

McConnell revealed to Hewitt the components of a deal that he is negotiating with Reid that aides say may be the way out of the deficit standoff. He says the proposal is gaining some traction.

The first part of the plan was unveiled on Tuesday. It would require the president to request of congress an increase in the debt ceiling.

Their proposal also includes a congressional "deficit reduction committee" with "no outsiders" and "no administration officials."
McConnell stressed this would not be a commission - the dreaded Washington word.

The committee would include members of the House and Senate equally balanced. He said the group would be required to produce a mandatory report by the end of the year to deal with entitlement reform.

In addition, McConnell said the hope is to also include spending cuts agreed upon by the White House and House Republicans. He said that is the key. Will the White House agree to enough cuts to pass the House.