Benefits at risk, Geithner warns

“On August 2d, we’re left running on fumes,’’ Geithner said on CBS’s “Face the Nation.’’ “We have no capacity to borrow… . We have to act; Congress has to act ahead of that point. If they don’t act, then we face catastrophic damage to the American economy.’’

President Obama met with congressional leaders from both parties at the White House last night in an effort to reach a compromise to avert default on the debt. Obama and the lawmakers made no statements immediately after the meeting, but they are scheduled to meet again today.

The nation is set to surpass the legal cap on its borrowing on Aug. 2, accumulating debt of more than $14.2 trillion, and Congress must pass legislation to raise that cap to prevent default.

Despite House Speaker John Boehner’s announcement Saturday night that he favors a $2 trillion plan for debt reduction rather than the $4 trillion sought by Democrats, Geithner and other administration officials said yesterday that they still are hoping for a larger deal.

The two sides have been mired in negotiations for months, stymied in a political and ideological standoff over taxes and the size of the federal government.

Republicans who control the House do not want to raise the debt ceiling un less Democrats agree to significant spending cuts to offset the increased borrowing potential. Democrats have said they will not agree to significant cuts without tax increases on wealthier Americans and big business to help offset the cuts, something the GOP has scoffed at.

The parties were working toward a possible agreement last week that would have cut some $4 trillion in spending and raised the debt ceiling, but Boehner, an Ohio Republican, said on Saturday that larger deal was off the table as long as the White House continued to insist on tax increases. He expressed support for a smaller agreement that would not include tax increases.

Senate Republican leader Mitch McConnell of Kentucky reiterated that position on “Fox News Sunday,’’ saying, “We’re not going to raise taxes in the middle of this horrible situation.’’