President Barack Obama will meet Sunday with top lawmakers, in hopes of making progress toward an agreement to prevent a government default. Both the White House and top Republicans are playing down the prospects for a deal in Sunday’s talks.
The ongoing negotiations between the Obama administration and Republican leaders have two goals. One is to reduce the government’s $14.3 trillion debt, which is the current legal borrowing limit. The other is to raise that limit before August 2, when the U.S. could default on some of its loans, which would damage its credit rating.
President Obama met with top lawmakers from both parties on Thursday to discuss the problem. He said the meeting was constructive, but that the parties were still far apart.
The president scheduled another meeting for Sunday, and said Thursday that White House and congressional staffs would work through the weekend, to enable negotiators to make progress. “I will reconvene congressional leaders here on Sunday, with the expectation that at that point the parties will at least know where each other’s bottom lines are, and will, hopefully, be in a position to then start engaging in the hard bargaining that is necessary to get a deal done," he said.
Some lawmakers from both parties were expressing optimism on Thursday that a deal could be concluded soon. But on Friday, White House Press Secretary Jay Carney cautioned that an agreement should not be expected immediately. “I am not prepared to say that we will produce something Sunday. I think I would not anticipate that, necessarily, in terms of the final product at all. I would simply say that we do expect progress to be made, as it is being made in between these two meetings," he said.
The Republican Speaker of the House of Representatives, John Boehner, also warned Friday against expectations of a quick deal. "There is no agreement in private or in public. And as the president said yesterday, we are "this far apart." It is not like there is some imminent deal about to happen," he said.
Mr. Obama indicated early in the week that he believed conditions are right for a major deal to reduce the deficit. Such an agreement could cut the deficit by as much as $4 trillion over at least ten years.
To do so, the president will need to overcome opposition from Republicans and some Democrats.
The White House said a big debt reduction plan could involve savings in social programs such as Medicare, Medicaid and Social Security. Many Democrats, including House Minority Leader Nancy Pelosi, reject any reduction in the benefits Americans receive from these programs.
Republicans, meanwhile, are strongly opposed to raising taxes or eliminating tax breaks that benefit wealthier Americans.
The number-two House Republican, Eric Cantor, said Friday he and Speaker Boehner will not allow taxes to be increased. "Now it just does not make sense for Americans to suffer under higher taxes in an economy like this. And as the Speaker said, there is no way that the House of Representatives will support a tax increase," he said.
The president’s spokesman, Jay Carney, said no single plan will ultimately be approved. The final deal will likely be a compromise including some of Mr. Obama’s proposals, those from Democrats and Republicans, and the findings of two bipartisan independent commissions.
Adding to the urgency of the talks was Friday’s report from the Labor Department, showing that the U.S. economy’s recovery from recession continues to slow.
The figures showed that only 18,000 jobs were created in June, and that the nation’s unemployment rate increased slightly, to 9.2 percent.
The president said Friday a deal on the debt would reassure U.S. and global financial markets, and would give American businesses confidence to resume hiring.