The following is a rush transcript of the July 24, 2011, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: I'm Chris Wallace.

It's the dog days of summer in Washington and the grand bargain has now become the great divide.

(MUSIC)

The country's top leaders rush to restart negotiations that are broken down. As the debt ceiling deadline draws near, can default be avoided? Is an agreement still possible?

We'll sit down with the administration's point man, Treasury Secretary Tim Geithner.

Then, the president tells Congress to come up with its own plan. But Republicans are making an offer Democrats can refuse. We'll find out what the GOP plans could do before the financial markets open in Asia from the top Republican negotiator, Speaker of the House John Boehner.

Geithner and Boehner only on "Fox News Sunday."

Plus, what happens if there is no deal? Will there be market melt down? Who will get the blame?

We'll ask our Sunday panel about the political and policy realities.

All right now on "Fox News Sunday."

And hello again from Fox News in Washington.

It is now nine days and counting until the U.S. hits the debt limit. With the collapse of talks about a grand bargain, can the nation's leaders come up with a last ditch plan to raise the debt ceiling before August 2nd?

We'll talk John Boehner in a moment. But, first, another key figure at the center of the talks, Treasury Secretary Tim Geithner.

And, Secretary Geithner, welcome to "Fox News Sunday."

TREASURY SECRETARY TIM GEITHNER: Good to see you, Chris.

WALLACE: Congressional Republicans are working on a two-stage plan that would cut over a trillion dollars in spending right away and raise the debt ceiling into early next year, then there would be a mechanism for more cuts that if approved, the debt ceiling would be raised past the 2012 election.

Will the president sign that into law?

GEITHNER: Chris, let me tell you what we're trying to do, what the president is trying do, is, first and most important, we have to lift this credit default from the economy for -- you know, for the next 18 months. We have to take that threat off the table through the election. But we also want to try to make sure we come together and make some choices, lock in some long-term savings to help get our fiscal house in order. We need to do those things so that Congress can get back to the business of trying to do things to make economy stronger and get more Americans back to work.

WALLACE: So, for lack of a better word, I'll call it the Boehner plan. Will the president veto that?

GEITHNER: Well, again, let me sit back for one second.

There are two types of plans on the table now. One is the framework that that president and the speaker of the House have been talking about for the last several weeks now.

WALLACE: I thought that's dead.

GEITHNER: No, they're talking still because again, both the president the speaker believe that the best thing we can do is put together a very substantial contribution to getting our fiscal house --

WALLACE: So, you're saying that so-called grand bargain is still alive?

GEITHNER: Well, I wouldn't say it that way. I'm just saying there's two approaches before us. Now is again, something like that comprehensive balance, entitlement savings to secure Medicare and Medicaid for the future with tax reform that would generate revenues, help us solve this problem.

But there's also some talk about a plan that Senator McConnell and Senator Reid both put forward. It would also take default off the table and put in place a special committee with special powers to try to move legislation to achieve that same outcome.

Now, you can solve this problem lots of different ways. But two key things are, we take default off the table, the federal default off the table, through the election and we put in place a frame work of tough reforms and forces congress to act relative -- you know, we don't want to fall behind the curve with this and it's important we not just take default off the table but we demonstrate to the world that we can start to make a change to get --

WALLACE: All right. So let me go with this a different way. A plan that would only guarantee cuts and a debt ceiling in early next year?

GEITHNER: It makes no sense. I mean, again --

WALLACE: The president will veto it?

GEITHNER: Again, he said he's very clear about that. But let me explain why that would be irresponsible. I mean, you know, we started this process seven months ago. Here we are seven months later, we're running out of runway. We're almost at the edge. I never thought they would take this close to the edge and let politics get in a way of demonstrating -- well, will we pay our bills on time? It has tens six or seven months.

The idea that we're going to spend another seven months lifting the cloud of default from the American economy, it seems irresponsible approach. It would be bad for the economy. And we don't think that makes sense -- and there's no reason why we have to do it that way.

WALLACE: Secretary Geithner, here's what I don't understand. What you're saying, I understand trying to get past 2012. You certainly don't want to do this again. There also are some political considerations.

If I may the question, sir. There are some political considerations as well. But what you you're saying is, you would insure hitting debt ceiling now just to make sure you don't possibly hit the debt ceiling early next year?

GEITHNER: Let me say to you --

WALLACE: You can get the thing that will kick this can down the road for six months, why aren't you grabbing on that like a life preserver?

GEITHNER: Because we're trying to do something more important. Again, we're trying to do avoid not just default today, but the specter of default in the future.

WALLACE: But you may end up with default today, sir.