WASHINGTON (AP) — With an August deadline for a budget deal to raise the nation's debt ceiling looming, President Barack Obama and congressional negotiators are looking at closing some tax loopholes and cutting popular social benefit programs as they work to reach an agreement between Republicans and Democrats.
With the two sides still far apart, Obama has
called everyone back to the White House for a rare Sunday meeting.
The president met with the eight top Republican and
Democratic congressional leaders for an hour and a half Thursday, hoping to
bridge ideas held by the two sides — each considered untenable by the other. On
Capitol Hill, Democrats appeared especially rattled that the discussions
included proposals to cut spending for Social Security as well as Medicare and
Medicaid.
House Democratic leader Nancy Pelosi opposes
cutting the benefit programs and will have an opportunity to raise her concerns
when she meets Friday with the president.
"We are not going to balance the budget on the
backs of America's seniors," Pelosi said.
After dragging on for weeks, the top-level talks
have entered a suspenseful endgame. The shape of an agreement remains in doubt
as the nation moves closer to an Aug. 2 deadline to raise the government's debt
ceiling.
Obama pushed for an ambitious deficit reduction
plan of roughly $4 trillion, the biggest of three options he laid on the table.
It would require sizeable tax revenues, which many Republicans oppose, and
spending reductions for entitlement programs, opposed by many Democrats. But
the idea of a potentially historic deal was well received by the meeting participants,
officials said later, even though the details remained in dispute.
After Thursday's 90-minute session, Obama said
Democrats and Republicans should be prepared to show their bottom-line demands
when they return to the bargaining table Sunday.
The negotiating stakes are high. Without a deal on
deficit reduction, Republican leaders say they don't have enough GOP votes to
increase the nation's borrowing authority, raising the danger of the first ever
U.S. default on its debts when the current $14.3 trillion debt ceiling is
tapped out.
"Everybody acknowledged that we have to get
this done before the hard deadline of Aug. 2 to make sure that America does not
default for the first time on its obligations," Obama said. "And
everybody acknowledged that there's going to be pain involved politically on
all sides."
That leaves little time to agree on 10-year deficit
reductions of $2 trillion to $4 trillion.
The major clash centers on how to reduce spending
on major entitlement programs such as Medicare, Medicaid and Social Security,
all prized by Democrats, and on tax changes that would close loopholes and end
certain corporate breaks. Republicans insist that any tax changes be used to
lower rates on corporations and individuals; Obama wants them also to generate
more tax revenue.
Increasing the debt ceiling through the end of 2012
— a date favored by the White House — would require authorizing about $2.4
trillion in additional borrowing. House Speaker John Boehner has insisted on a
10-year deficit reduction figure that, at a minimum, matches the amount of
additional borrowing. One aide to a lawmaker in Thursday's meeting said Obama
made it clear he wouldn't sign a budget and debt agreement that didn't extend
the debt ceiling until after the November 2012 presidential election.
In the meeting, Obama told the leaders that they
faced three options — a small deficit reduction plan, a medium plan that would
reduce deficits by $2 trillion over 10 years or a big agreement that would
shoot for up to $4 trillion in deficit reductions over the next decade. Obama
indicated he preferred the largest number.
In the meeting, Boehner and Senate Minority Leader
Mitch McConnell of Kentucky backed Obama's bigger, more ambitious goal, said
Democratic officials familiar with the talks. Their lieutenants, Senate GOP
Whip Jon Kyl of Arizona and House Majority Leader Eric Cantor of Virginia,
indicated they believed the medium-size option was more realistic. Both Cantor
and Kyl had participated in talks led by Vice President Joe Biden that had
already identified about $2 trillion in deficit reduction.
The negotiations are politically difficult for both
parties.
Raising the debt ceiling is unpopular with voters,
especially those who vote Republican, increasing concern among GOP lawmakers
that they could be challenged by fellow Republicans in primaries across the
country.
The big entitlement programs such as Social
Security, Medicare and Medicaid have long been protected by Democrats in
Congress.
Underscoring the political stakes, the Pew Research
Center reported Thursday that in a recent poll it found that six of 10 of those
surveyed believe it is more important to maintain Social Security and Medicare
benefits than to reduce the budget deficit.
Associated Press writers Ben Feller, Andrew Taylor,
Alan Fram, Ricardo Alonso-Zaldivar and Laurie Kellman contributed to this
report.
Copyright
2011 The Associated Press.
(AP
Photo/Charles Dharapak)
