- The Washington Times - Thursday, July 7, 2011

President Obama and top congressional Republicans said significant differences remain after high-stakes talks Thursday at the White House on the government’s budget and debt woes, although both sides called the talks constructive and agreed to work through the weekend on a renewed push for a deal.

Mr. Obama said after the meeting that the two sides are still “far apart” on an agreement, while his own path grew more difficult as he faced a potential rebellion in his own ranks. Congressional Democrats and liberal groups expressed unhappiness over reports that trims to Social Security could be part of the final package that could bring up to $4 trillion in cuts and budget savings over the next decade.

Mr. Obama had summoned the leaders of the House and Senate in both parties to the White House as the deadline approaches for Congress to raise the nation’s borrowing limit of $14.29 trillion. The president has said a deal must be reached within the next two weeks, or the U.S. will risk defaulting on its obligations.

”The parties are still far apart on a wide range of issues,” Mr. Obama told reporters in an impromptu statement in the White House press briefing room, while he added the session had been “constructive.” House Speaker John A. Boehner, Ohio Republican, called the session “productive.”

Despite the pessimism, there was also a sense among some that the bargaining may be reaching a critical phase after months of deadlock.

“There’s a substantial belief that whatever’s going to happen is likely to happen in the next few days,” Sen. Roy Blunt, Missouri Republican, said at a Capitol Hill news conference. “We’ll see how genuine everyone is in trying to get there.”

While Republicans have long balked at any tax increases as part of the deficit deal, Mr. Obama’s liberal supporters made it clear Thursday that they would not tolerate benefit cuts to programs such as Social Security and Medicare.

“Any discussion of Social Security and Medicare should be on its own table,” House Minority Leader Nancy Pelosi, California Democrat, said after the meeting. “Do not consider Social Security a piggy bank for giving tax cuts to the wealthiest people in the country.”

“Cutting Social Security to reduce the national debt is like attacking Iraq to get Osama bin Laden - the two things are not related,” added Jim Dean, chairman of Democracy for America, a grass-roots group founded by his brother, former Democratic National Committee Chairman Howard Dean.

Administration officials, staffers and lawmakers will work through the weekend, the president said. By Sunday, “the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done,” Mr. Obama said.

The administration has shown a willingness to include Social Security as part of the discussion as the president seeks an agreement of nearly $4 trillion in deficit reduction over the next 10 years. House Republican leaders said negotiators have already agreed on at least $2 trillion in savings, and they are pressing for more.

But the reintroduction of Social Security as part of the talks threatened a revolt among Democrats. A group of progressive House Democrats said they are preparing to send a letter to Mr. Obama opposing any cuts in Social Security, Medicare or Medicaid. They said they would vote against any deal that cuts entitlements or does not include a tax increase on the wealthiest taxpayers.

White House spokesman Jay Carney spent much of his hour-long press briefing Thursday trying to tamp down speculation that Social Security benefits would be cut in any deal to reduce the deficit.

“There is no news here. The president has always said that while Social Security is not a major driver of the deficit, we do need to strengthen the program,” Mr. Carney said. He added that any deal must not “slash benefits,” but he didn’t address whether Mr. Obama would allow de facto reductions though annual cost-of-living adjustments.

“We do not believe, and a lot of independent economists back up our contention, that Social Security is an issue in the near- and medium-term deficit,” Mr. Carney said. “So when you talk about deficit reduction, dealing with the issues that have been before us in these negotiations for these many weeks, Social Security is not a factor.”
Republican leaders have been insistent that the deal not include tax increases, although some Republican lawmakers have indicated an openness to consider eliminating tax “loopholes.”

“Everything is on the table except raising taxes on the American people,” Mr. Boehner said. “We are not going to raise taxes on the very people that we expect to reinvest in our economy and to help create jobs.”

Mr. Obama and his top economic advisers met for 90 minutes in the Cabinet Room with a bipartisan congressional delegation that included Mr. Boehner; Mrs. Pelosi; House Majority Leader Eric Cantor, Virginia Republican; Senate Majority Leader Harry Reid, Nevada Democrat; and Senate Minority Leader MitchMcConnell, Kentucky Republican.

“People were frank,” Mr. Obama said. “And everybody acknowledged that there’s going to be pain involved politically on all sides. But our biggest obligation is to make sure that we’re doing the right thing by the American people, creating an environment in which we can grow the economy and make sure that more and more people are being put back to work.”

• Sean Lengell contributed to this report.