Obama: No deal on debt, deficit without compromise
WASHINGTON - President Barack Obama declared Monday he would reject any stopgap extension of the nation's borrowing limit, adding fresh urgency for Republicans and fellow Democrats to resolve intense tax and spending disputes and head off economic calamity.
The administration says there must be a deal by Aug. 2 or the U.S. will face its first ever debt default, something that could return the U.S. economy to recession and reverberate in global financial markets.
"If not now, when?" Obama said in a news conference just ahead of his latest bargaining session with congressional leaders at the White House. That meeting lasted about 90 minutes.
He pledged daily bargaining sessions until agreement and refused to even entertain the idea of a backup plan should they fail.
"We are going to get this done," Obama insisted.
Not only the strength of the U.S. economy at stake, but also the political fortunes of Obama himself -- as well as lawmakers -- heading into next year's presidential and congressional elections.
Yet the path to an agreement remained hard to see. Even as he spoke, Republicans affirmed their opposition to the tax increases Obama sees as crucial along with spending cuts for reducing huge federal deficits and restraining the soaring national debt.
A potential deal -- a package of spending cuts and tax increases that could total $2 trillion or more over a decade -- is considered necessary for Congress to lift the nation's $14.3 trillion debt limit and avoid default.
Obama renewed his case Monday for a package that would put a historic dent in the country's deficits by blending politically poisonous elements for both parties: tax hikes for the wealthy and big corporations opposed by Republicans and social service cuts that Democrats decry.
Speaking shortly before heading to the White House, House Speaker John Boehner stood firm in his opposition to including tax increases.
"Do you need to raise taxes in order to get control of spending? I think the answer is no," he said.
Obama tried to alter the debate by saying that any potential tax increases on wealthier people would not take effect until 2013. That would fall after the next election, when Obama will seek re-election and control of the House and the Senate will be at stake. Meanwhile, a short-term debt-limit increase would keep the issue boiling during the campaign.
More broadly, Obama sought to position himself as the pragmatist seeking a compromise in a divided town. He tried to build pressure on Congress to prove to a disillusioned American people that "this town can actually do something once in a while."
To Republicans, he said they have long pushed deficit reduction as the way to create desperately needed jobs and now won't take yes for an answer. "Where are they?" he said. "I mean, this is what they claim would be the single biggest boost to business certainty and confidence. So what's the hold up?"
And to Democrats eager to protect entitlements, Obama said doing nothing is not tenable. The president said Social Security, Medicare and Medicaid have to be made stronger for the longer term and the rising debt each year will crowd out Democratic priorities such as education and medical research.
"So, yeah, we're going to have a sales job," he conceded. "This is not pleasant."
The meeting Monday was expected to focus on potential debt savings identified by Vice-President Joe Biden and lawmakers during earlier talks. But that group, too, was bitterly divided over taxes, and the amount of savings they found elsewhere still falls short of what all sides agree must come together quickly.
For his part, Boehner told reporters that he agreed with Obama that the nation's borrowing limit must be raised, but he said revenues can be raised without hiking taxes. Boehner said Obama insists on raising taxes but the White House isn't serious enough about reforming entitlement programs.