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Obama: Debt Deal Needed to Guarantee Pension Checks


President Barack Obama sits with House Speaker John Boehner of Ohio, as he meets with Republican and Democratic leaders regarding the debt ceiling, in the Cabinet Room of the White House in Washington, DC, July 11, 2011

President Barack Obama sits with House Speaker John Boehner of Ohio, as he meets with Republican and Democratic leaders regarding the debt ceiling, in the Cabinet Room of the White House in Washington, DC, July 11, 2011

U.S. President Barack Obama says he cannot guarantee that there will be money to pay millions of pension checks scheduled to go out on August 3, unless a deal can be made with opposition Republicans on difficult debt issues.

He spoke in a television interview by CBS, which put some of his remarks on its website Tuesday.

Obama and Republicans in Congress have sharply different ideas on how to raise the $14.3 trillion legal limit on the amount of money Washington can borrow, and they have to reach an agreement by August 2. Otherwise, they face the possibility that the United States would have to default on some payments.

Obama held another in a long series of negotiations with congressional leaders Tuesday, but the two sides appeared to be growing further apart before the talks began. The top Senate Republican, Mitch McConnell, said it may not be possible to get a long term solution to the budget problem as long as Obama is in office. McConnell called Obama's proposals "smoke and mirrors".

But shortly before the meeting at the White House, McConnell proposed a solution using parliamentary maneuvers that would allow the president to raise the debt ceiling without Republican support.

The president proposes a $4 trillion package of spending cuts and revenue increases over 10 years, but the Republicans say they will not allow tax increases and want to focus only on cutting government spending.

Democrats strongly oppose cuts in popular social programs for the poor and elderly. They say raising taxes on the wealthy and big corporations is essential because the government needs more revenue to close the budget gap.

Republicans say it makes no sense to raise taxes on wealthy people who can invest in the economy and create jobs. The speaker of the House of Representatives, Republican John Boehner, has said no deal can pass the House unless it rules out tax increases and cuts spending.

Treasury Secretary Timothy Geithner said Tuesday the two sides understand what it will take to reach a deal and come to an agreement. He has warned previously that failing to raise the $14.3 trillion legal limit on what the government can borrow to pay its debts would be "catastrophic."

Some information for this report was provided by AP.

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