Negotiations on Deficit Resume at White House

By GARDINER HARRIS

Published: July 10, 2011

WASHINGTON — President Obama and Congressional leaders from both parties met for about an hour and a half over deficit reduction on Sunday night at the White House, still far apart on details big and small.

The negotiators are racing to complete a compromise by Aug. 2, when the Treasury Department says the government will run out of borrowing power, requiring new authority from Congress.

As pool reporters and photographers entered the Cabinet Room for a brief peek at the proceedings shortly after the scheduled 6 p.m. start, a reporter shouted, “Mr. President, can you work it out in 10 days?” Mr. Obama replied, “We need to.”

Treasury Secretary Timothy F. Geithner said Sunday that Mr. Obama would continue to press for the largest deficit reduction possible in the negotiations, adding that “it’s not clear that it’s easier trying to do less.”

The remarks came after House Speaker John A. Boehnerreleased a statement Saturday night saying he was pulling back from efforts for a deal that would reduce the deficit by as much as $4 trillion over 10 years. Mr. Boehner said he would instead focus on crafting a smaller package more in line with the $2 trillion to $3 trillion in spending cuts and revenue increases negotiated earlier by Vice President Joseph R. Biden Jr.

On the CBS program “Face the Nation,” Mr. Geithner said the main problem in the negotiations was the Republican insistence that any deal involve only spending cuts and no tax increases.

“And as you saw on the Ryan budget,” he said, referring to a plan proposed by Representative Paul Ryan, Republican of Wisconsin, that would cut entitlement programs and end the government guarantee for certain health benefits, “if you try to do it with just cuts, you’re putting unacceptably deep cuts in benefits for Medicare beneficiaries in the future and you can’t do that politically, and it’s unfair to do it.”

Top Republicans reiterated Sunday that they would not accept a deal that included increased taxes. On “Fox News Sunday,” the Senate Minority Leader Mitch McConnell of Kentucky said that he was “for the biggest deal possible, too, it’s just that we’re not going to raise taxes in the middle of this horrible economic situation.”

Although Republican presidential candidates like Representative Michele Bachmann, Republican of Minnesota, have said that raising the debt ceiling would be a mistake no matter what deal is struck, Mr. McConnell said on Sunday that “nobody is talking about not raising the debt ceiling. I haven’t heard that discussed by anybody.”

Mr. McConnell said that he had a “contingency plan” for raising the debt ceiling before the Aug. 2 deadline, when the Treasury Department has said the government would begin defaulting on some debt. He said he would reveal his plan later this week if negotiations with the White House fail.

On the CNN program “State of the Union,” the House Republican whip, Kevin McCarthy of California, said that “Boehner has been very clear that there are no votes for a tax increase.” Instead, Republicans are asking the president to include only the spending cuts that have been identified in negotiations with Congressional leaders, Mr. McCarthy said.

Referring to the earlier bipartisan negotiations headed by Mr. Biden, which is said to have produced more than $2 trillion in savings, Mr. McCarthy said of Mr. Boehner: “What he’s saying is, let’s go there. There’s no taxes. There are cuts right there, but why don’t you also get a balanced budget?”

The White House chief of staff, William M. Daley, said on “This Week” on ABC that Mr. Obama would continue to push for a major deal to reduce the deficit. “Everyone agrees that a number around $4 trillion is the number that will make a serious dent in our deficit,” Mr. Daley said. “He didn’t come to this town to do little things. He came to do big things.”

Mr. Daley accused Republicans of being “concentrated on trying to bring continued tax relief to the wealthy.”

Although some Republicans have questioned whether the United States would truly run out of borrowing authority on Aug. 2, Mr. Geithner repeated Sunday that the date is a true deadline.

“I have to write 80 million checks a month to Americans, including 55 million Americans who depend on their Social Security check,” Mr. Geithner said on “Face the Nation.” “We have to make principal payments or roll over $500 billion of debt in the month of August, about $87 billion in that first week in August.”

“If they don’t act, then we face catastrophic damage to the American economy and the leadership, to their credit, and I mean Republicans and Democrats, fully understand that,” Mr. Geithner added.

He said the outlines of a deal would need to be completed by this week “and certainly by the end of next week” in order to provide enough time for Congress to pass legislation before the deadline. And he ruled out a so-called constitutional option that some have argued would allow Mr. Obama to continue paying the nation’s debts without Congressional approval. “There is no constitutional option, there is no delay option, there is no creative financial option,” Mr. Geithner said on “Meet the Press” on NBC.

Senator Jeff Sessions of Alabama, the senior Republican on the Budget Committee, said on “Face the Nation” that negotiators were running out of time. “We’re not just going to ratify some secret deal even if our good leaders plop it down on the floor of the Senate,” Mr. Sessions said. “We need at least seven days to review something as historic as this. So I’m really worried about all of that.”

Related

• Boehner Scales Back Deficit Talks, Citing Tax Increases (July 10, 2011)

• Presidential Candidates Warn About Debt Deal (July 10, 2011)

• Somehow, the Unemployed Became Invisible (July 10, 2011)