House Speaker John A. Boehner abandoned efforts Saturday night to cut a far-reaching debt-reduction deal, telling President Obama that a more modest package offers the only politically realistic path to avoiding a default on the mounting national debt.
On the eve of a critical White House meeting on the debt issue, Boehner (R-Ohio) told Obama that their plan to “go big,” in the speaker’s words, and forge a compromise that would save more than $4 trillion over the next decade had fallen victim to the toughest ideological issues: how to raise taxes and cut spending on popular health and retirement programs.
That leaves negotiators reexamining a less-ambitious framework — aimed at saving roughly $2.4 trillion over the next decade — that had been under discussion between Vice President Biden and a bipartisan group of lawmakers. But that group’s talks broke down more than two weeks ago over the tax issue as well.
“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase,” Boehner said in a statement released less than 24 hours before the White House meeting was to take place.
The sweeping deal Obama and Boehner were discussing would have required both parties to take a bold leap into the political abyss. Democrats were demanding more than $800 billion in new tax revenue, causing heartburn among the hard-line fiscal conservatives who dominate the House Republican caucus. Republicans, meanwhile, were demanding sharp cuts to Medicare and Social Security, popular safety net programs that congressional Democrats have vowed to protect.
Obama, at least, was willing to make that leap and had put significant reductions to entitlement programs on the table. But on Saturday, Boehner blinked: Republican aides said he could not, in the end, reach agreement with the White House on a strategy to permit the Bush-era tax cuts for the nation’s wealthiest households to expire next year, as lawmakers undertook a thorough rewrite of the tax code.
Democrats quickly accused Boehner of placing tax breaks for the rich above the nation’s financial salvation.
“We cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well,” White House communications director Dan Pfeiffer said in a written statement.
“Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington.”
The Sunday meeting at the White House will go on as scheduled, and Pfeiffer said Obama will continue to press for a broad deal aimed at stabilizing the soaring national debt. Without such a plan, lawmakers in both parties have said they will not vote to grant the Treasury additional borrowing authority. Unless Congress acts to raise the $14.3 trillion legal limit on the debt, Treasury Secretary Timothy Geithner has said that the government will begin to default on its obligations after Aug. 2.
The Biden framework, which he crafted with key Republicans, including House Majority Leader Eric I. Cantor (R-Va.), includes cuts to federal agency budgets and more modest reforms to entitlement programs. That package would allow Congress to approve an extension of the federal debt ceiling into spring 2013.
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