Negotiations regarding raising the country's debt-ceiling limit heated up over the weekend as Congressional leaders and President Barack Obama seek to forge a compromise that includes measures to reduce the nation's soaring federal deficit. The uptick in negotiations comes as the August 2 deadline for Congressional action quickly approaches.
On Saturday House Speaker John Boehner (R-OH) walked away from a proposed deal that included cuts of $4 trillion. Earlier in the week, the president called for a large deficit-reduction plan that included revenue enhancements. While it appears Boehner may have been open to the so-called "grand bargain," he was forced to pull back due to rumblings in his own party. It seems the Republicans' desire to pass significant spending cuts did not outweigh their opposition to any tax increases.
The White House said it will continue to make its case for the "grand bargain" as negotiations move forward but acknowledged the chances of it being implemented without the Speaker's support were minimal. Still, Democrats were willing to compromise on entitlement reforms if the Republicans agreed to find additional revenue.
Boehner: Deficit Reductions Must Match Debt-Ceiling Increases
Reports indicate that Boehner spoke with the president before announcing that he could not support the $4 trillion plan. The Speaker reportedly continued to make the case that any agreement must include deficit reductions that match, dollar-for-dollar, any increase in the debt ceiling.
"Despite good faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Boehner said on Saturday. "I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the (Vice President) Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any increase in the debt limit."
On Sunday, President Obama called Congressional leaders to the White House and made his case, once again, for negotiators to compromise on the larger $4 trillion package. House Majority Leader Eric Cantor (R-VA), who seemed to take the lead for Republicans in the meeting, insisted that any "grand bargain" including new tax revenues was dead on arrival in the increasingly conservative and GOP-dominated House
According to reports, there were many sharp, impassioned exchanges between lawmakers on both sides. Although Boehner agreed with the president that a larger deal on the debt-ceiling is preferable, he conceded that there is no path to passage in the House. Instead, he again pushed for turning the debate towards figures identified by the Biden-led group a couple of weeks ago.
President Obama plans to hold daily meetings until the issue is resolved, saying inaction is unacceptable and disastrous for the U.S. economy.
"Let's step up. Let's do it," the president said at a Monday morning news conference. "I'm prepared to take on significant heat from my party to get something done, and I expect the other side should be willing to do the same thing if they mean what they say. If not now, when?'
The president reiterated that he will not sign any short-term agreement that would raise the debt limit by 30, 60, 90 or 180 days. "This is the United States of America. We don't do business in three-month increments. We don't risk us defaulting on our obligations because we can't put politics aside."