Decision for Sarah Palin could come in August or September

A day after Michele Bachman's formal presidential candidacy announcement, Sarah Palin heads to Iowa for the debut of her movie "The Undefeated." Jan Crawford reports on Palin's possible presidential run.
Palin in Iowa for "The Undefeated" debut
Sarah Palin

Sarah Palin is keeping her toes wet. And she says she may decide in the next two months whether or not she will jump in the presidential waters.

"Legally, of course, there are time frames and that time is coming rapidly in front of all of us," Palin told Fox News Wednesday, "you know, August and September, you do have to start laying out a plan if you are to be one to throw your hat in the ring."

The former governor of Alaska, who is now a Fox News contributor, recently told Newsweek Magazine she "can win" the White House.

Palin also blasted a last-ditch proposal from fellow Republican Sen. Mitch McConnell to allow President Obama to raise the legal limit on U.S. borrowing in exchange for a trio of politically unpopular votes on the government's spending limit between now and Election Day 2012.

"We cannot afford to back off and just hand him with the white flags waving in front of him, a white flag saying here, Mr. President, we trust you, you take over, you do it," Palin said, adding that the Senate Republican Leader's plan "makes no sense."

McConnell has said his plan is not his first choice, but he wanted to offer an opportunity to avoid the first ever U.S. default on its debt obligations since he sees Republicans being blamed for the impasse, thereby helping Mr. Obama's chances of re-election.

"We knew shutting down the government in 1995 was not going to work for us; it helped Bill Clinton get re-elected,'' McConnell said Wednesday in a radio interview with conservative Laura Ingraham, "I refuse to help Barack Obama get re-elected."

The Obama administration and most economists, including Federal Reserve Board Chairman Ben Bernanke, have said the United States and global economy would face catastrophe if the borrowing limit, now at $14.3 trillion, is not raised by August 2. special report: Election 2012

White House talks with congressional leaders on the matter have grew testy Wednesday, with Mr. Obama saying he would risk his presidency for his position after House Republican Leader Eric Cantor suggested a short-term deal to raise the limit so talks could continue. Mr. Obama wants to get a deal that would last beyond November 2012, when voters decide if he gets another four years in power.

"I've reached my limit. This may bring my presidency down, but I will not yield on this," said Mr. Obama, a Republican source told CBS News senior White House Correspondent Bill Plante.

Palin said the U.S. could make spending cuts without raising the limit.

"I'm still not one to buy into this notion that we must incur more debt, [that] we must increase the debt ceiling by Aug. 2, otherwise there will be catastrophe," Palin said. "You prioritize ... you pay for the essentials first and then the non-essentials have to get cut."

  • Corbett Daly On Twitter» Deputy Politics Editor Corbett B. Daly is based in Washington. He has worked at Reuters, Thomson Financial News and CBS MarketWatch.