Washington-President Barack Obama portrayed himself as the responsible centrist in the debt ceiling talks Monday, urging members of both political parties to “pull off the Band-Aid” and “eat our peas” in the name of fiscal responsibility and avoid a potentially devastating national default.
“I’m happy to consider all options,” the president told reporters shortly before meeting with top congressional leaders at the White House. “Let’s step up. Let’s do it.”
Obama insisted a deal to increase the current $14.3 trillion debt ceiling will be reached before August 2. Treasury officials have warned that a partial default could be triggered if lawmakers fail to act by that date.
Such a failure could lead to skyrocketing interest rates and a plummeting dollar, among other things.
Obama reiterated his warning against either party taking a “maximalist position” in the ongoing negotiations, and insisted he is willing to take “significant heat” from his own party in order to get a deal done.
Republican leaders should as well, he said, referencing GOP opposition to any tax hikes.
The president, who promised daily meetings until a deal is reached, dismissed talk of a short-term solution that avoids politically wrenching decisions on revenue increases and cuts in politically popular entitlement programs such as Medicare and Medicaid.
“Now is the time to deal with these issues,” he declared. “If not now, when?”
Negotiators are trying to salvage a deal after House Speaker John Boehner, R-Ohio, pulled back Saturday from a proposed “grand bargain” that would have saved up to $4 trillion over the next decade. Republicans are demanding steep spending cuts in exchange for raising the ceiling, but are adamantly opposed to tax increases.
Democrats, in turn, are demanding revenue increases to reduce the impact of domestic spending cuts and ensure that the richest Americans shoulder some of the burden of a deal. House and Senate progressives are also balking at the idea of reining in spending on Medicare, Medicaid, and Social Security.
“We, unfortunately, remain far apart because every time we get close the Republicans move the goal posts further to the right, further and further to the far right,” Rep. Steve Israel, D-New York, said Monday on CNN’s “American Morning.”
“We’re not in this boat because America taxes too little,” said Rep. Tom Price, R-Georgia. “We’re in this boat because America spends too much, Washington spends too much.”
The president insisted Monday that he is not looking to raise any taxes until 2013 or later. He claimed he has “bent over backward to work with the Republicans” and not force them to vote on any revenue hikes in the short term — a politically toxic move with the GOP’s conservative base.
In exchange, Obama said, he wants to ensure that the current progressivity of the tax code is maintained.
A Democratic congressional aide, however, told CNN that talks over the weekend produced no breakthroughs.
Obama continued pushing for a “grand bargain-style deal that would ultimately include new revenues, like getting rid of tax breaks that benefit millionaires, while Republicans argued “it was time to lower sights to a smaller deal that relies on cuts alone,” the aide said.
A senior administration official said the president will not accept an agreement that, in the White House’s view, is not balanced.
An aide to Boehner, meanwhile, said the speaker is now proposing a smaller deal based on roughly $2.4 trillion in cuts identified during a previous round of bipartisan talks spearheaded by Vice President Joe Biden.
Boehner hinted at the GOP’s strategy on Saturday evening, when he issued a statement saying that his party cohorts could not support a major deal as long as Obama and Democrats insist on increasing taxes. He said that any such revenue-raising initiative would prevent the bulk of Republicans from supporting a more ambitious deal, even if it was one that included cutting spending and reforming entitlement programs such as Medicare.
Boehner insisted the talks’ parameters should be scaled back to focus on budget cuts alone.
The White House immediately pushed back, with a senior administration official saying Boehner had initially accepted the need to increase tax rates on wealthy Americans as part of a deal. But then, the official said, Republicans offered a different plan in talks with Obama that began Thursday.
Christine Lagarde, the new head of the International Monetary Fund, warned Sunday that a failure to raise the debt ceiling “would jeopardize the stability” of the global economy. There will be “real nasty consequences,” she told ABC.
Regardless, both Democrats and Republicans on the Sunday talk shows suggested the two sides remain far from an agreement.
“What is really appalling is to see our Republican colleagues essentially providing a form of extortion — if you don’t agree to deficit reduction the way we want it, we’ll put all the jobs at risk, because we will allow the United States to default on its debt,” said Rep. Chris Van Hollen, D-Maryland, on the CNN show “State of the Union.” “That’s irresponsible.”
At the heart of the GOP resistance is a bedrock principle pushed by conservative crusader Grover Norquist against any kind of tax increase. A pledge pushed by Norquist’s group, Americans for Tax Reform, has been signed by more than 230 House members and 40 senators, almost all of them Republicans.
Ted Barrett, Kate Bolduan, Tom Cohen, Dan Lothian, Alan Silverleib, and Deirdre Walsh contributed to this report to the attention of CNN
Black Queen Lara’s Comment
The article above is about to blame President Obama if debate does not go smoothly just like the Press did at the brink of the adverted Government Shutdown; but I will make an exception this time. The trouble makers in the US Economy are the Republicans. Boehner’s theory of new Republicans being inflexible, is a joke to me, because he is as ill-intended as them.
This is how it goes until now: The Congress Reps push debates on Budget in a temporary situation; which have been accepted as compromise by the majority of the Obama Team, to keep disasters away. These Reps Congress have succeeded in giving me the impression that America has the government of a new developping country, which President needs to be held on a leash. You’ve got to wonder why this is legal, Marc!
My semi-emotional comment will not help the Economy… I will have to analyze this deeper…
