- The Washington Times - Sunday, July 10, 2011

President Obama and congressional leaders ended a Sunday night session of deficit-reduction talks at the White House without announcing any progress, but they agreed to meet again Monday.

The president also scheduled a news conference for 11 a.m. Monday at the White House on the negotiations, in which he is still pushing to include tax increases as part of a $4 trillion deal over 10 years.

House Speaker John A. Boehner, Ohio Republican, announced Saturday night that he won’t agree to the president’s $4 trillion target if it included tax increases. On Sunday, his office said he reiterated that point at the meeting, saying that he favors a deal closer to the $2 trillion in cuts floated by a bipartisan commission led by Vice President Joseph R. Biden.

“The speaker restated the fundamental principles that must be met for any increase in the debt limit: spending cuts and reforms that are greater than the amount of the increase, restraints on future spending, and no tax hikes,” said a statement released by Mr. Boehner’s office. “The President agreed with the Speaker that their previous talks did not produce any agreement.”

As the negotiators entered the White House Cabinet Room on Sunday night, a reporter asked Mr. Obama if he could get a deal done in the next 10 days, the president’s rough deadline.

“We need to,” Mr. Obama replied.

House Minority Leader Nancy Pelosi, California Democrat, issued a statement after the talks, saying she “is still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.”

“This package must do no harm to the middle class or to economic growth,” Mrs. Pelosi said. “It must also protect Medicare and Social Security beneficiaries, and we continue to have serious concerns about shifting billions in Medicaid costs to the states.”

The administration says the government will begin to default on its obligations if Congress doesn’t approve an increase in the nation’s borrowing limit of $14.29 trillion by Aug. 2. Republican congressional leaders are holding firm on requiring deep spending cuts as part of any deal to raise the debt ceiling.

But two top White House advisers said earlier Sunday that the president is committed to reducing that debt by as much as possible through a series of reforms to entitlement programs such as Medicare and tax increases on corporations and the wealthiest Americans.

Hours before the evening meeting, Treasury Secretary Timothy F. Geithner warned again Sunday that negotiators need to do something “very big, very substantial” to reduce deficits.

“We’re going to try to get the biggest deal possible, a deal that’s best for the economy,” Mr. Geithner said on NBC’s “Meet the Press.”

White House Chief of Staff Bill Daley said the president is committed to a “big deal” that would reduce the deficit by about $4 trillion - twice the size that some Capitol Hill lawmakers have suggested.

“It will send a statement to the world that the U.S. has gotten hold of their problems - fiscal problems - and they’re moving forward,” Mr. Daley said on ABC’s “This Week.” “And it would give confidence to the American people, give confidence that we can then move forward over the next number of years to bring economic soundness.”

But Democratic and Republican lawmakers are still far apart in their positions, with taxes a major sticking point. Republicans are resisting the administration’s push to include as much as $1 trillion in tax hikes in the $4 trillion package. Democrats are rebelling against the president’s willingness to reduce spending on entitlement programs such as Social Security and Medicare.

Republican congressional leaders are pursuing a deal focused on about $2 trillion to $2.5 trillion in deficit reduction, which was the target of talks led by Mr. Biden until those discussions broke down. House Majority Leader Eric Cantor, Virginia Republican, pulled out of those talks over the likelihood of tax increases.

But Mr. Boehner’s push for a $2 trillion debt reduction deal isn’t universally accepted by all GOP leaders on Capitol Hill. Sen. Jeff Sessions of Alabama, the senior Republican on the Senate Budget Committee, said shaving even $4 trillion from the debt wouldn’t go far enough to solve the nation’s fiscal problems.

“Four trillion (dollars) really is far too little,” he said on “Face the Nation” Sunday. “We’re talking about only 5 percent reduction in the growth of our spending when you cut the spending over 10 years, $4 trillion.”
Mr. Geithner said Mr. Obama still wants any deal to include some tax increases on corporations and the country’s wealthiest individuals. There is “no alternative,” he said.

The president has “proposed some totally sensible tax reforms that would eliminate loopholes and ask the wealthiest 2 percent of Americans to pay a modest additional share of the burden,” the secretary said on CBS’ “Face the Nation.”

But Mr. Sessions said the administration’s position the debt cannot be decreased without some tax increases “is absolutely not correct.”

Mr. Sessions also complained that all of the administration-lead debt reduction talks have been held behind closed doors.

“I have been arguing for months that we should be doing this publicly in the constitutional process so the American people could see what’s going on,” he said.

“We’re not just going to ratify some secret deal even if our good leaders plop it down on the floor on the Senate. We need at least seven days to review something as historic as this.”

Congressional leaders and the administration agree that the debt ceiling must be increased before Aug. 2, the day Mr. Geithner says the federal government will default on its loans - a scenario many agree would trigger another economic crisis.

The president “said from the beginning we will not default. He’s also said we can’t play politics with this,” Mr. Geithner said on “Face the Nation.” “He’s also said we can’t take this too close to the edge because that would be irresponsible. So he knows we have to do this, and it’s tough.”

The secretary also urged Republicans not to abandon the talks if Democrats don’t meet their demands.

“Both sides are going to have to make some compromises,” Mr. Geithner said on “Meet the Press.” “And one thing to Republicans: We know this is very hard to do. But they should not walk away from trying to do something good for the country.”

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