- The Washington Times - Thursday, July 21, 2011

President Obama huddled once again with congressional leaders Thursday to discuss ways to raise the nation’s debt ceiling, as pressure mounts for Congress to act before an Aug. 2 deadline or risk defaulting on the government’s loans.

And while the sides tried to shoot down reports that a deal was close, a few signs indicated a possible thaw in the icy debt debate.

When House Speaker John A. Boehner was asked during his weekly news briefing at the Capitol whether he had prepared his caucus for a compromise, he replied, “I have.”

The Ohio Republican added he is committed to working out a deal to raise the debt limit, even though some conservative tea party-backed House Republicans are opposed to such action.

Congress must act before August the 2nd, and I hope that we are prepared to do that,” he said.

The White House said there was momentum for a “balanced approach” — Democratic code for a deal that would include tax increases.

“As more and more attention has been paid to this issue, there has been a significant amount of acceptances, broadly, by Democrats, independents and Republicans, including elected officials, that a balanced approach that requires compromise on all sides is the right way to go,” said White House press secretary Jay Carney.

Rep. Dan Lungren, a nine-term California Republican, expressed optimism a deal can be worked out before the deadline.

“I’ve been here long enough to see us go to the brink many times, and normally we find some way to avoid going over the top,” the lawmaker told a gathering of reporters at the Capitol.

Mr. Lungren added that he understands the frustration of many conservative freshman House Republicans who are leery of raising the debt ceiling — the government’s legal limit on how much it can borrow to pay for operations and debt obligations.

“We have a very large influx of people who have not been here before who come from the business world — small business particularly — and their influence is a tremendously beneficial one,” he said. “They do not understand how we can continue to rack up debt without paying for it.”

But Mr. Boehner held fast to his party’s position that no tax increases be included in any debt deal, saying, “I’ve never voted to raise taxes, and I don’t intend to.”

Mr. Carney repeatedly denied a report Thursday on the New York Times website that the president and Mr. Boehner had secretly met and were close to a deal. “There is no progress to report,” he said. “There is no deal. We are not close to a deal.”

The president also met Thursday evening with House and Senate Democratic leaders. The meeting ended with no announcements or public statements.

Treasury Secretary Timothy F. Geithner has warned the $14.29 trillion debt ceiling must be raised by Aug. 2 or the federal government risks defaulting on its sovereign debt — a scenario he says could trigger a major economic crisis. If the debt ceiling wasn’t raised but the federal government didn’t default, it would have to immediately slash spending by 40 percent.

Several plans and approaches have been floated regarding how best to deal with the debt.

The president is pushing for a “grand bargain” that would include deficit reduction of about $4 trillion over 10 years, including more than $1 trillion in increased revenue from closing tax loopholes and other tax reforms. A bipartisan group of senators called the “Gang of Six” has suggested a similar deal.

The House Republicans’ “cut, cap and balance” plan would raise the debt ceiling $2.4 trillion, but only after significant and immediate spending cuts and the adoption by Congress of a constitutional amendment requiring a balanced federal budget to be submitted to the states for ratification.

The measure passed the House this week mostly along party lines and is scheduled for a vote Friday in the Democrat-controlled Senate, where it is expected to lose. Democrats say the measure would lead to cuts in entitlement programs for seniors, middle-income Americans and the nation’s most vulnerable. Senate Majority Leader Harry Reid, Nevada Democrat, on Thursday called the House bill among the “worst legislation in the history of this country.”

Senate Minority Leader Mitch McConnell also has proposed a “backup plan” that would increase the debt ceiling while getting more than $1 trillion in spending cuts, though that proposal is unpopular among House Republicans.

*Dave Boyer contributed to this article.

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