Obama summons GOP, says no to short-term debt deal

Pres­i­dent Barack Obama makes a state­ment to reporters about debt ceil­ing nego­ti­a­tions, Tues­day, in the James Brady Press Brief­ing Room of the White House in Wash­ing­ton. (AP Photo/Manuel Balce Ceneta)

ERICA WERNER

Asso­ci­ated Press

WASHINGTON — Pres­i­dent Barack Obama prod­ded Con­gress Tues­day to reach a sweep­ing long-term deal within two weeks to raise the nation’s bor­row­ing limit rather than “kick the can down the road” with a makeshift, short-term solu­tion to stave off a first-ever U.S. default. And he declared the agree­ment must include the tax hikes Repub­li­cans strongly oppose.

Obama said he was sum­mon­ing lead­ers of both par­ties to the White House on Thurs­day to try to get it done and beat an Aug. 2 dead­line to avert a finan­cial cri­sis that could shake eco­nomic mar­kets worldwide.

Repub­li­cans sounded entirely unim­pressed with Obama’s insis­tence that the effort include tax increases for the wealthy and nar­rowed loop­holes for oil com­pa­nies as well as big cuts in gov­ern­ment spending.

“We’re not deal­ing just with talk­ing points about cor­po­rate jets or other ‘loop­holes,’” said House Speaker John Boehner of Ohio. “The leg­is­la­tion the pres­i­dent has asked for — which would increase taxes on small busi­nesses and destroy more Amer­i­can jobs — can­not pass the House, as I have stated repeatedly.”

Boehner said he’d be happy to join dis­cus­sions at the White House but pre­dicted they “will be fruit­less until the pres­i­dent rec­og­nizes eco­nomic and leg­isla­tive reality.”

Under­scor­ing the dif­fer­ences, there was even brief dis­cus­sion about Obama’s claim that progress had been made over the week­end when, as he put it, “my team and I had a series of dis­cus­sions with con­gres­sional lead­ers in both parties.”

After quick denials from some Repub­li­can spokes­men, at first, a con­gres­sional offi­cial said Boehner and Obama had met Sun­day at the White House. That offi­cial spoke only on con­di­tion of anonymity con­cern­ing the pri­vate meet­ing. Obama spokesman Jay Car­ney declined to pro­vide any details

In his remarks Tues­day, Obama said he strongly opposes a stop­gap, short-term debt-limit increase, as sug­gested by some law­mak­ers. But he stopped short of rul­ing out a lim­ited exten­sion, and spokesman Car­ney later declined to say whether the pres­i­dent would veto such a measure.

Obama renewed his stand that any deal must include not only spend­ing cuts but also new rev­enue — tax increases vehe­mently ruled out by many Repub­li­cans in Congress.

“We need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States gov­ern­ment and the credit of the Amer­i­can peo­ple,” Obama said at the White House.

“We’ve made progress, and I believe that greater progress is within sight, but I don’t want to fool any­body — we still have to work through some real dif­fer­ences,” the pres­i­dent said.

He said con­gres­sional lead­ers from the House and Sen­ate, both Repub­li­cans and Democ­rats, were being invited to meet on the issue Thurs­day at the White House. That would bring the top eight law­mak­ers together with Obama, Vice Pres­i­dent Joe Biden and top admin­is­tra­tion finan­cial officials.

Obama spoke as the Aug. 2 dead­line for rais­ing the nation’s bor­row­ing limit came closer. Experts say law­mak­ers must waste no time in mak­ing a deal if they are to have any chance of get­ting it final­ized and passed through both cham­bers of Con­gress in time.

Despite the president’s opti­mism, it remained unclear where com­pro­mise could be found. Repub­li­cans are insist­ing they will note vote to raise the debt limit with­out major spend­ing cuts; Democ­rats are refus­ing to sign off on cuts of such mag­ni­tude with­out at least some tax increases as well. Repub­li­cans say they won’t sign off on any tax hikes at all, includ­ing those Obama wants tar­get­ing the wealth­i­est Amer­i­cans or clos­ing loop­holes to corporations.

The pres­i­dent called on law­mak­ers to “leave their ulti­ma­tums at the door,” but he stuck to his — that any deal must include new tax rev­enue. “We need to take on spend­ing in the tax code, spend­ing on cer­tain tax breaks and deduc­tions for the wealth­i­est of Amer­i­cans,” Obama said. The White House is propos­ing about $400 bil­lion in increased tax revenues.

In the Sen­ate on Tues­day, Major­ity Leader Harry Reid, D-Nev., post­poned a test vote on a Libya res­o­lu­tion amid increas­ing oppo­si­tion from Repub­li­can law­mak­ers who insisted they should be work­ing on finan­cial secu­rity not national secu­rity. Sev­eral Repub­li­can sen­a­tors had indi­cated they would oppose using the week debat­ing the Libya measure.

All told, law­mak­ers and the admin­is­tra­tion are seek­ing deficit cuts in the range of $2.4 tril­lion over the com­ing decade to bal­ance a sim­i­lar increase in the debt limit — enough to keep the gov­ern­ment afloat past the Novem­ber 2012 elec­tion. Cur­rently the debt limit is $14.3 trillion.

The admin­is­tra­tion says that if the government’s bor­row­ing limit is not increased by Aug. 2, the U.S. will face its first default ever, poten­tially throw­ing finan­cial mar­kets into turmoil.

Many con­gres­sional Repub­li­cans indi­cate they’re uncon­vinced that such sce­nar­ios would occur, and some admin­is­tra­tion offi­cials worry that it could take a finan­cial calamity before Con­gress acts.

With the dead­line near­ing, the Sen­ate can­celed its July Fourth recess planned for this week.

In dis­cus­sions led by Vice Pres­i­dent Joe Biden that broke off late last month, Repub­li­can and Demo­c­ra­tic nego­tia­tors found more than $1 tril­lion in poten­tial spend­ing cuts over the com­ing decade, includ­ing reduc­tions favored by both sides.

A Demo­c­ra­tic offi­cial said last week that of those cuts, roughly $200 bil­lion would come mainly from sav­ings from Med­ic­aid and Medicare, the gov­ern­ment health insur­ance pro­grams for the poor and elderly. Another $200 bil­lion would come from cuts in other auto­mat­i­cally paid ben­e­fit pro­grams, includ­ing farm sub­si­dies. Another large chunk would come from cuts in dis­cre­tionary spend­ing that Con­gress approves every year.

Posted by AP News on Jul 5 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.