Debt limit: Tick, tick, tick…

President Barack Obama, right, House Democratic Leader Nancy Pelosi of Calif., left, and House Speaker John Boehner of Ohio, center, meet with Congressional leadership in the Cabinet Room of the White House, Sunday, July 10, 2011, in Washington, to discuss the debt. (AP Photo/Carolyn Kaster)

With pressuring continuing to build but no breakthroughs in sight, budget bargaining between President Barack Obama and top lawmakers resumes Monday at the White House, with both sides hoping to slash the deficit as the price for permitting the government to borrow more than $2 trillion to pay its bills.

In a rare Sunday meeting in the White House Cabinet Room, Obama continued to push for a “grand bargain” in the range of $4 trillion worth of deficit cuts over the coming decade, but momentum is clearly on the side of a smaller measure of perhaps half that size. Obama continues to press for revenue increases as part of any agreement but Republicans remain stoutly opposed — despite some private hints to the contrary last week by House Speaker John Boehner, R-Ohio.

Obama holds a news conference Monday morning. The third White House meeting since Thursday is slated for the afternoon.

An Aug. 2 deadline looms to stave off a potentially disastrous first-ever default on U.S. obligations, but the two sides seem no closer than they were when Republicans withdrew from talks led by Vice President Joe Biden more than two weeks ago, citing an impasse on taxes.

Last week, Boehner and Obama had private talks that led Democrats to believe the House speaker was willing to entertain revenue increases as part of a full overhaul of the tax code later this year in exchange for Democrats agreeing to stiff curbs on the growth of Medicare and lower increases in Social Security cost-of-living adjustments. But Boehner recoiled and abandoned the idea Saturday night in a move that rattled the talks.

Sunday’s sometimes testy session was shorter than some had anticipated and it’s clear neither side is willing to budge on taxes. Democrats say tax increases are a prerequisite for big spending cuts; Republicans rule out the idea unless taxes are lowered elsewhere.

“The whole thing is off the rails,” said a Democratic official close to the talks, requiring anonymity to speak candidly.

Monday’s meeting will feature a discussion of tentative agreements reached in discussions led by Vice President Joe Biden. They include cuts to farm subsidies, student aid, federal workers’ pensions and domestic agency budgets, among others.

Republicans say the Biden group identified more than $2 trillion in cuts, but Democrats put the true figure significantly lower — in large part because many of their concessions on spending cuts relied on the assumption Republicans would accept some new tax revenues. But the Biden group was bitterly divided over taxes, as Republicans like House Majority Leader Eric Cantor of Virginia repulsed Democratic demands to shut down tax breaks for oil and gas companies and deductions enjoyed by the wealthy. And Republicans resisted Democratic attempts for a mechanism to guarantee the Pentagon would contribute to cuts.

“The Speaker told the group that he believes a package based on the work of the Biden group is the most viable option at this time for moving forward,” said a Boehner spokesman.

Sunday’s meeting featured some tense exchanges, officials briefed on the talks said, as Democrats accused Republicans of being inflexible. And officials briefed on the talks said Obama sharply rebuked Republicans for saying there’s no time for a “grand bargain” blending new revenues with big spending cuts — including curbs to Social Security and Medicare.

“If not now, when?” Obama asked, according to a Democratic official requiring anonymity because the session was private.

Senate GOP Leader Mitch McConnell, R-Ky., said a big $4 trillion bargain is off the table.

“Everything they told me and (Boehner) is that to get a big package would require a big tax increases in the middle of an economic situation that’s extraordinarily difficult, with 9.2 percent unemployment,” McConnell said on “Fox News Sunday.” ”We think it’s a terrible idea. It’s a job-killer.”

The lower $2 trillion-plus figure is noteworthy because it’s what’s needed under GOP-imposed ground rules to solve the issue until after next year’s elections and avoid another politically toxic vote before then. Boehner is insisting that any increase in the so-called debt limit be matched by larger cuts in spending, though the spending cuts would accumulate over the coming decade while the debt increase would last perhaps 1½ years.

Democrats continue to press for a larger agreement, arguing that it may be just as easy to achieve as a medium-sized deal.

Treasury Secretary Timothy Geithner cautioned Sunday on NBC’s “Meet the Press” that a package about half the size of the one Obama prefers would be equally tough to negotiate because it, too, could require hundreds of billions in new tax revenue — anathema to Republicans.

Meanwhile, the International Monetary Fund’s new chief, Christine Lagarde, said that if the U.S. fails to raise its debt limit, she foresees “interest hikes, stock markets taking a huge hit and real nasty consequences” for the American and global economies.

“I would hope that there is enough bipartisan intelligence and understanding of the challenge that is ahead of the United States, but also the rest of the world,” she said.

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Associated Press writers Jim Kuhnhenn and Laurie Kellman contributed to this report.

12 Responses to "Debt limit: Tick, tick, tick…"

  1. eve  July 11, 2011 at 2:32 pm

    Google what Iceland achieved (via recent vote) in answer to their “debt” problem.

    They told the bankers to go pound sand.

    Granted, our supposed (and I DO mean supposed) representatives are owned by the bankers, as is the MSM who is complicit in the fleecing of the US treasury. Since they’ve encountered ZERO resistance they will be heading for the SS funds next. Who will stop them?
    Oh, the US representatives will protect the US citizen! LOL!

    That being said, the US could take a hint and follow Iceland’s lead, but that would require the citizens being educated as to the reality of the situation AND the supposed (elected/selected) so-called representatives actually representing the populace.

    Tick, tick, tick (per article)?
    Is this supposed to hasten the acceptance of whatever our “elite betters” decide, while we thankfully and meekly accept the crumbs which fall from the sides of their engorged mouths?

    Iceland has it right.
    Congress CAN approve the printing of interest free monies and default would be painful ……. so.
    It’s like going to the doctor to get a shot.
    Get it over with, or let it worsen.

    Iceland is free. America is owned.
    We could change this. We can change this.
    The question is, will we?

    • griff  July 11, 2011 at 5:42 pm

      Icelanders identified the culprits and took action.

      I remember we tried to resist the bankster bailout. Americans flooded the capitol switchboard with calls in opposition. The first vote failed.

      Then over that following weekend that’s all we heard was tales of gloom and doom if they didn’t get their money. We heard how the entire economy was on the brink of collapse and much suffering would befall the planet should we resist further. So of course, the infinitely courageous and fearless American Sheeple acquiesced, and the rest, they say, is history.

      Change? I thought that’s what we’ve had the last two-some thing years. Ha. I almost can’t wait to see what kind of idiocy we fall for next.

      • b mcclellan  July 11, 2011 at 8:03 pm

        My pitchfork is sharp and my torch is aflame, but we’ve more than five potential wounds to cauterize.

        I take some umbrage as to your sheeple reference Griff. Self imprisoned is an apt excuse lest one has laid it down before.

        Phone calls and sit in’s are passe and it’s apparent most have neither the resources or in many cases the spine for outright tar and information feathers action. Witness our fourth estate.
        Our only true weapon is unity, times sanity, times balls,.divided by hunger.

        • griff  July 11, 2011 at 9:03 pm

          Present company excluded from the Sheeple reference. The fact remains that we beat it down the first time, and we were terrorized into accepting it. Of course the media propaganda bombardment had much to do with it.

          “A society whose citizens refuse to see and investigate the facts, who refuse to believe that their government and their media will routinely lie to them and fabricate a reality contrary to verifiable facts, is a society that chooses and deserves the Police State Dictatorship it’s going to get.” – Ian Williams Goddard

          • b mcclellan  July 11, 2011 at 10:33 pm

            Dissemination of not quite current events brings one to the river of past denial overlooking broad descriptions of ones brethren.

            We could sell wool.

  2. b mcclellan  July 11, 2011 at 3:16 pm

    Careful Eve, you’re redlining the logic meter again..

  3. woody188  July 11, 2011 at 6:09 pm

    I’d like to see the IMF operate without US funding. Good luck Ms. Lagarde!

  4. eve  July 11, 2011 at 8:37 pm

    I wonder how difficult it would be to learn (taking a stab at this word) “Icelandic?”

  5. woody188  July 11, 2011 at 10:15 pm

    “If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains set lightly upon you; and may posterity forget that ye were our countrymen.” –Samuel Adams

    Default or die!

    • b mcclellan  July 11, 2011 at 10:38 pm

      Must we feed them not only here but, internationally ?
      Long bags to over reach..

      Was the Berlin Airlift the last time a foreign country thanked us ?

    • Carl Nemo  July 12, 2011 at 12:37 am

      Hear…hear Woody188…! : |

      Carl Nemo **==

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