Obama Forges Ahead on Debt Deal
Policy + Politics

Obama Forges Ahead on Debt Deal

Two of President Obama’s top advisers said he will continue to press for a far-reaching, $4 trillion deal to cut the deficit when he meets with congressional leaders on Sunday evening, despite new opposition from Republican leaders to such a compromise.

White House Chief of Staff William M. Daley and Treasury Secretary Timothy F. Geithner said on the Sunday political talk shows that Obama still believes in a deal that would reduce the deficit through a combination of spending cuts, entitlement reforms and tax increases.

“He’s not someone to walk away from a tough fight. This is a very tough political fight, no question about it,” Daley said on ABC’s “This Week.” “But he didn’t come to this town to do little things. He came to do big things.”

Appearing on NBC’s “Meet the Press,” Geithner said, “We’re going to try to get the biggest deal possible, the deal that’s best for the economy.”

Their comments came after House Speaker John A. Boehner (R-Ohio) told the president on Saturday night that he could not continue with negotiations over a $4 trillion deficit-reduction deal when Obama and congressional leaders meet at the White House at 6 p.m. Sunday.

Republican opposition to a deal of that size continued to harden Sunday. Senate Minority Leader Mitch McConnell (Ky.) said on “Fox News Sunday” that a large-scale deal is off the table, since the GOP could not accept the tax increases envisioned by the president.

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

Boehner’s and McConnell’s remarks sent negotiators back to a smaller measure that would reduce the deficit by $2.4 trillion in exchange for congressional support for raising the federal limit on borrowing. A bipartisan group led by Vice President Biden had come up with a framework for a deal of that magnitude before it broke up over disagreements about taxes.

McConnell pledged on Sunday that Congress will raise the federal debt limit despite opposition from members of his own party. Geithner has warned of a catastrophic U.S. default if the $14.3 trillion ceiling is not increased by Aug. 2.

“Nobody is talking about not raising the debt ceiling. I haven’t heard that discussed by anybody,” McConnell said. He said he would describe a “contingency plan” later this week if a deal isn’t reached.

Daley called Boehner’s abandonment of a broad deal “unfortunate.” He added: “Everyone agrees that a number around $4 trillion is the number that will . . . make a serious dent on our deficit. It will send a statement to the world that the U.S. has gotten hold of their problems, fiscal problems, and they are moving forward.”

But Daley also said the debt limit will be raised. “By the 2nd of August, there’s no question in my mind that the leaders of America . . . will not allow the first default in the history of the country to occur,” he said.

Read More at The Washington Post.