Testy talk, still no deal

President Barack Obama talks to reporters Monday. On the need for a deal to reduce the deficit, he said: “If not now, when?”

New York Times

President Barack Obama talks to reporters Monday. On the need for a deal to reduce the deficit, he said: “If not now, when?”

Washington Post

WASHINGTON — Talks between President Barack Obama and congressional Republicans grew increasingly contentious on Monday, as GOP leaders flatly rejected his call to raise taxes on the wealthy as part of a bipartisan agreement to restrain the nation's debt.

News conferences by Obama and House Speaker John Boehner, R-Ohio, served as a testy prelude to an afternoon bargaining session that only emphasized the partisan divide.

During the meeting, Obama challenged Boehner to buck the anti-tax hard-liners in his party who, the president suggested, are blocking the path to a landmark compromise to reduce borrowing by as much as $4 trillion over the next decade. Boehner and House Majority Leader Eric Cantor, R-Va., responded by urging Democrats to settle for a more modest reductions-only deal that would save $2.4 trillion but would not touch tax breaks for the nation's richest households.

Obama emphatically rejected the option of a short-term deal, saying he would not sign "a 30-day or a 60-day or a 90-day extension."

As time runs perilously short for action, Obama challenged top lawmakers to return to the White House today with fresh ideas for a debt-reduction plan that could pass the House and Senate. All sides are scrambling to reach a deal as part of a tradeoff in which Congress would agree to extend the nation's debt limit by Aug. 2 to prevent a catastrophic government default on its bills.

A deal is only "going to get harder" as the election approaches, Obama said. "So we might as well do it now. Pull off the Band-Aid. Eat our peas.

"If not now, when?"

In addition to major cuts to domestic agencies, the House GOP proposal calls for slicing about $250 billion from Medicare over the next decade by asking well-off seniors to pay more for health coverage, placing new restrictions on Medigap policies and putting in place new co-payments and cost-sharing provisions for home health care, among other changes. Those reductions would come on top of about $500 billion in Medicare savings previously enacted as part of Obama's overhaul of the health-care system — cuts Republicans blasted during last fall's midterm campaign.

Obama rejected the GOP plan, said a Democratic official familiar with the discussions told the Washington Post. He argued that he could not ask "moderate-income seniors to bear $500 or more of additional costs when you couldn't ask the most well-off American to give an extra $5 to getting the deficit down."

At a White House news conference hours earlier, a clearly exasperated Obama said he has "bent over backward" to meet Republican demands for sharp cuts in government spending, citing his offer to trim Social Security and Medicare benefits — an offer that has drawn howls from liberal Democrats.

''We keep on talking about this stuff and we have these high-minded pronouncements about how we've got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let's step up. Let's do it," Obama said. "I'm prepared to take significant heat from my party to get something done. And I expect the other side should be willing to do the same thing."

Republicans fired back that they already are taking plenty of heat for considering an increase in the legal limit on the debt, which stands at a record $14.3 trillion. In a sign of deepening tensions, Boehner suggested that the only concession Obama should expect from Republicans is a vote to allow the Treasury to continue borrowing.

"Most Americans would say that a 'balanced' approach is a simple one: The administration gets its debt-limit increase and the American people get their spending cuts and their reforms," Boehner told reporters at a news conference before heading to the White House. "Adding tax increases to the equation doesn't balance anything."

Obama and Boehner took pains to express their admiration for each other, but the prickly rhetoric suggested that hope has faded for a far-ranging $4 trillion agreement. The two had hoped to forge a historic deal to tackle the biggest drivers of the debt, including health-care and retirement programs, military spending and an inefficient tax code.

Boehner blew up those talks last weekend, citing irreconcilable differences with the White House over taxes and the magnitude of structural changes to entitlement programs. "I want to get there," he said. "But it takes two to tango, and they're not there yet."

Information from the Associated Press was used in this report.

On the Web

What happens if the U.S. government defaults on its debt? An explainer is at links.tampabay.com.

Testy talk, still no deal 07/12/11 [Last modified: Tuesday, July 12, 2011 8:40am]

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