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If deal on debt is near, Obama willing to

WASHINGTON — The contentious budget talks that have dominated Washington for months intensified Wednesday, prompting President Barack Obama to say he would accept a short-term hike in the debt ceiling if it gave lawmakers time to finalize a comprehensive deal.

Obama had pledged to veto any short-term measure, but White House spokesman Jay Carney said Wednesday that the president could accept an extension of "a few days" if it allowed a long-term deficit-reduction and debt-ceiling deal to work its way through Congress.

The White House concession added to a whirlwind week in which the focus of negotiations appeared to whipsaw from a fallback plan that would raise the debt ceiling but do little to control future borrowing to an ambitious, but complicated, bipartisan strategy for raising taxes and cutting cherished health and retirement programs.

By Wednesday evening, as House Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., met with Obama at the White House, aides in both parties said a grand bargain to slice $4 trillion out of the federal budget over the next decade was back on the table.

"There are multiple trains heading towards the station, and we have to decide," Carney said before Obama met with the two GOP leaders. "We need to be sure that that fail-safe option is there even as we pursue, aggressively, the possibility of doing something bigger."

Republican leaders went on record 10 days ago against the Obama proposal, saying that as long as the deal included higher tax revenue, it could not pass the House. They maintained that stance after Wednesday's meeting.

In a brief interview after the White House meeting, Cantor said he remained committed to "not raising taxes" but did not rule out a larger plan. "Again, there are a lot of things that may or may not be possible, but we're just trying to drive toward a result right now," he said.

The mood has changed in the past two days after the bipartisan "Gang of Six" senators unveiled a plan to shave almost $4 trillion off the deficit. Despite the fact that the plan included new tax revenue by closing loopholes, it received a relatively warm reception in some Republican quarters.

That has given Democrats hope that GOP resistance may be weaker than previously believed to a rewrite of the tax code that would raise significant new revenue — a key goal of negotiations between Obama and Boehner.

Still, the proposal came under fire Wednesday from some key Republicans, including House Budget Committee Chairman Paul Ryan, R-Wis., who said it calls for a tax increase of at least $2 trillion over the next decade.

By Wednesday afternoon, Senate Budget Committee Chairman Kent Conrad, D-N.D., a leader of the Gang of Six effort, said his primary push now is for "an option at some point for the Senate and the House to vote on the plan we've put together — which is the only bipartisan plan that's come from anywhere."

As the negotiations moved closer to the Aug. 2 deadline, the key obstacle to a deal remained the vehement opposition among many House Republicans to all of the proposals, especially ones that include higher tax revenue.

Some Democrats and administration officials question whether the GOP leadership can effectively sell a compromise to a fractious caucus determined to cut spending at all costs, particularly the bloc of 87 freshman Republicans. Democrats say they are not sure if there is any way to satisfy the needs of that faction.

If deal on debt is near, Obama willing to 07/20/11 [Last modified: Wednesday, July 20, 2011 11:30pm]
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