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House Speaker John Boehner calls consequences of U.S. default "a crapshoot"

UPDATED 5:09 p.m. ET
House Speaker John Boehner

President Obama's latest offer on cutting the deficit over time will not pass the House of Representatives, House Speaker John Boehner said on Wednesday, adding that he does not know what would happen if Congress does not raise the legal amount the U.S. can borrow by August 2.

"What the president is asking us to do just won't pass," Boehner told a small group of reporters at his office, including CBS News White House Correspondent Chip Reid.

Asked what would happen if the United States defaulted on its debt obligations for the first time because Republicans and Democrats could not come to an agreement before the deadline, Boehner said: "Nobody wants to go there, because nobody knows what's going to happen. It's a crapshoot."

Lawmakers from both parties want to use the threat of the debt ceiling deadline to work out a broader package on long-term deficit reduction, with Republicans looking to cut trillions of dollars in federal spending, while Democrats are pushing for a more "balanced approach," which would include both spending cuts and increased revenue through taxes.

Boehner said he and his Republican colleagues would remain steadfast in their opposition to higher taxes in order to reduce the deficit.

"The American people want us to hang tough," Boehner said.

Federal Reserve Board Chairman Ben Bernanke suggested on Wednesday the United States would prioritize payments, first paying creditors, including China, if the two sides do not make a deal to raise the debt ceiling from the current $14.3 trillion by Aug. 2. That could mean checks do not go out to retirees receiving benefits from the Social Security program.

"The assumption is that as long as possible, the Treasury would want to try to make payments on the principal and interest to the government debt, because failure to do that would certainly throw the financial system into enormous disarray and have major impacts on the global economy," Bernanke told lawmakers on Capitol Hill Wednesday.

President Obama caused a stir Tuesday when he told the CBS Evening News he "cannot guarantee" the 27 million Social Security checks due out on August 3rd would be mailed as scheduled if Congress did not first reach a deal, though White House spokesman Jay Carney on Wednesday expressed confidence it would not come to that.

White House hopeful Michele Bachmann called Mr. Obama's remarks "dangerous" and called on the president to "tell the truth."

"We cannot go on scaring the American people, we need to be truthful. And I call on the president and the Treasury Secretary (Timothy Geithner) to tell the truth to the American people," the Minnesota Republican lawmaker told reporters on Capitol Hill.

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