WASHINGTON (Reuters) - Political leaders in Washington should wrap up talks to increase the United States' borrowing authority by June 8 to avoid spooking financial markets, a top congressional Democrat said on Monday.
Steny Hoyer, the No. 2 Democrat in the House of Representatives, said negotiators should avoid the brinkmanship that has marked other budget disputes this year as they try to forge a deal that would give lawmakers political cover to back an increase in the $14.3 trillion U.S. debt limit.
"If we're going to have to do it, my view is doing it sooner rather than later roils the markets less," Hoyer said in a speech at the Bipartisan Policy Center, a think tank.
The Treasury Department has warned that the United States could risk default if it does not increase the debt limit by August 2, but Republicans and some Democrats say they won't back an increase without a deficit-reduction deal that will keep the national debt at a sustainable level.
The debate has so far not had an impact in bond markets as investors continue to view U.S. debt as a safe haven.
Many Washington observers expect that Vice President Joe Biden and other negotiators in White House-led talks will work right up to that deadline. Some Republicans have suggested that markets would not necessarily be upset if they blow past it.
One participant in the Biden talks said Hoyer's proposed deadline was unrealistic.
"I think June 8 would be pressing it," Republican Senator Jon Kyl told reporters. "Knowing where we are in our conversation with Vice President Biden, I don't think it'd be very easy to get there."
Another Republican negotiator suggested that Biden's group was only laying the groundwork for final talks between President Barack Obama, House Speaker John Boehner, the top Republican in Congress, and Senate leaders.
"Ultimately decisions are going to be made between the Speaker, the President and those in the Senate," said Representative Eric Cantor, the No. 2 House Republican. "We are engaging in these discussions right now in the Biden commission to really understand where both sides are."
The Biden group, which includes four Democratic lawmakers along with Cantor and Kyl, is due to meet on Capitol Hill on Tuesday.
The group has so far agreed on roughly $150 billion in proposed spending cuts -- far short of the trillions of dollars in savings that Boehner has said will be necessary to win Republican support for raising the debt limit.
(Reporting by Richard Cowan and Andy Sullivan; Editing by Cynthia Osterman)