President Obama on Thursday told congressional leaders in a closed-door meeting that he wants to reduce the federal deficit by $4 trillion as the two sides inched closer to a deal that could allow the government to avoid defaulting on its debt. Congressional aides said Obama laid out the three deficit reduction proposals during the meeting, but favored the most sweeping plan, which would require budget-saving changes to Social Security and Medicare and include tax increases.
Congressional leaders will return to the White House on Sunday to hammer out a deal that slashes federal spending in exchange for an increase in the nation’s borrowing limit by the Aug. 2 deadline. If the limit isn’t raised by then, the government would default on its loans.
“What we decided was that staffs, as well as leadership, will be working during the weekend, and that I will reconvene congressional leaders here on Sunday with the expectation that, at that point, 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,” Obama said following the meeting
Lawmakers Thursday emerged as divided as ever over how to rein in the deficit. Spending cuts, reforms to entitlement programs like Social Security and tax increases have all been proposed, and Obama confirmed that both parties “are still far apart on a wide range of issues.”
House Speaker John Boehner, R-Ohio, said Thursday that he would not agree to increase the debt ceiling unless the spending cuts are at least as large as the proposed increase in the nation’s borrowing power.
“I’ve also made clear that we are not going to raise taxes on the American people,” Boehner said.”We’re not going to raise taxes on the very people that we expect to reinvest in our economy to help grow jobs.”
House Speaker Nancy Pelosi, D-Calif., meanwhile, warned that Democrats “do not support cuts in benefits to Medicare or Social Security.”
Pelosi said it would be hard for Obama to win House Democratic votes for any plan that cuts entitlement programs. She will meet privately with Obama on Friday as part of a series of meetings the president has held in recent days with individual congressional leaders.
Given the deep political divide over taxes and entitlement reform, lawmakers may look to less ambitious proposals offered by Obama.
One option would cut the deficit by $3 trillion, mirroring the plan a bipartisan group of lawmakers had been working on with Vice President Biden. That plan, according to House Majority Whip Eric Cantor, R-Va., would include reductions in entitlement spending but would not directly cut Social Security or Medicare benefits.
A third plan Obama proposed would trim about $2 trillion from the deficit, which is about the size of the debt limit increase Treasury Secretary Timothy Geithner is expected to request from Congress.
Democrats, trying to portray Republicans as defenders of the rich, advanced a resolution Thursday calling for higher taxes on those earning $1 million or more a year. Republican senators helped move the measure forward, saying it would provide a chance to discuss the debt issue and allow them to add amendments when it comes up again next week.
