White House officials claimed progress today in budget talks designed to raise the nation's $14.3 trillion debt ceiling while cutting federal spending, but said the obstacle is congressional Republicans who insist on no new revenues.
"To get significant debt reduction, there has to be a balanced approach," White House spokesman Jay Carney said after President Obama met with Senate Majority Leader Harry Reid, D-Nev.
Carney, who said "everybody believes a significant deal remains possible," said Democrats want to get new revenues from the elimination of subsidies and loopholes for wealthy Americans, such as the owners of oil companies and private planes.
Republicans said Obama's team is talking about tax hikes that will slow down economic growth and kill jobs.
Senate Minority Leader Mitch McConnell, R-Ky., who meets with Obama later today, posted a column on CNN's website today saying "the consequences of massive new tax hikes would be fewer jobs. "
"America does not face a debt crisis because we tax too little, but because Washington spends too much," McConnell wrote. "And tax hikes can't pass the Congress."
By Pablo Martinez Monsivais, AP
As the debt clock ticks toward a potential U.S. default, President Obama and congressional leaders are finally taking center stage.
Obama meets today, separately, with top Senate Democrat Harry Reid and Senate Republican leader Mitch McConnell, to talk about an impasse that involves taxes, spending, the $14.3 trillion federal debt ceiling -- and the prospect of a government default after Aug, 2.
That's the date after which the Treasury Department says it will not be able to pay the nation's obligations, unless Congress votes to raise the debt ceiling, the main plot in this latest Republican/Democratic drama over taxes and federal spending.
Obama and the Senate leaders follow an opening act featuring Vice President Biden and a bipartisan committee that fell apart when Republicans walked out last week in a dispute over taxes.
The Republicans, who had said they would oppose raising the debt ceiling without corresponding budget cuts, ended the Biden talks over Democratic proposals to increase taxes.
"Throwing more tax revenue into the mix is simply not going to produce a desirable result, and it won't pass," McConnell said Sunday on ABC's This Week With Christiane Amanpour. "I mean, putting aside the fact that Republicans don't like to raise taxes, Democrats don't like to either."
Congressional Democrats say they want to do things like limit mortgage deductions for households with incomes of more than $500,000 annually, and to eliminate oil and gas subsidies for companies that make more than $1 billion annually.
"Closing special interests tax subsidies is what they have walked away from," said Democratic Minority Leader Nancy Pelosi, D-Calif.
Pelosi and the top House Republican, Speaker John Boehner, will also likely get involved in budget talks at the presidential level.
As Obama gets personally involved, Democrats say the government needs more revenue if it is to reduce the federal, yet Republicans are risking a government default that could trigger another recession.
"The Republicans should stop playing chicken," Reid said. "It's not good for our country or the world."
Republicans -- who say higher taxes will stunt economic growth, predict Obama will see things their way, and sign off on a package of budget cuts without tax hikes.
"The president has to make a decision," said Sen. Jon Kyl, R-Ariz., on Fox News Sunday. "Which is more important to him: solving this problem, reducing spending somewhat, or making sure that we raise taxes on American economy?"
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