News / USA

Obama Meets Republican Leaders, Democrats on Debt Crisis

President Barack Obama (file photo)
President Barack Obama (file photo)

President Barack Obama and congressional leaders continue discussions on Thursday aimed at averting a U.S. government debt default on August 2. Lawmakers returned to the White House on Wednesday to examine options for a deficit reduction and debt package.

Avoiding a potentially calamitous default on the government's $14.3 trillion debt, with its domestic and global financial implications, becomes more urgent as the August 2 deadline nears.

Mr. Obama had two meetings on Wednesday.  One for just under an hour was with his fellow Democrats who have strongly opposed any major changes to government programs such as Social Security and Medicare as part of any deficit and debt compromise.

The other, lasting significantly longer, was with House of Representatives Speaker Republican John Boehner, and the House Majority Leader Eric Cantor who have resisted using tax increases to pay for deficit reduction.

None of the lawmakers spoke to news media at the White House after the talks.  Boehner had this to say in remarks to reporters on Capitol Hill the previous day.

"He talks about getting serious about cutting spending [but] we still have not seen the president's plan.  It is time for the president to get serious about working with Congress to solve this impending crisis," Boehner said.

Wednesday's talks focused in part on a complex plan by the so-called "Gang of Six" Republican and Democratic senators.  It proposes $3.7 trillion in deficit reduction over 10 years, with $500 billion in immediate spending cuts, as well as reforms to costly entitlement programs and an overhaul of the tax system.

Representative Cantor had some initial positive reaction, saying the plan seemed to include some constructive ideas.  But it has also been criticized by some key Republicans on Capitol Hill, and would require significant time to get through both chambers of Congress.

White House Press Secretary Jay Carney said on Wednesday that Mr. Obama remained hopeful that a larger package of spending cuts with ways to achieve more revenue can be achieved.

Carney said all agree a debt default must be avoided, adding that Mr. Obama would consider a very short term agreement to raise the $14.3 trillion debt ceiling, but only if leaders had already struck a bargain for a broader package.

"Even as we pursue the bigger prize we are working with Congress to ensure that there is a mechanism by which we simply raise the debt ceiling, or raise the debt ceiling and do something much smaller than the grand bargain," Carney said.

On Capitol Hill, Democrats assailed a measure called "Cut, Cap, and Balance" approved by the Republican-controlled House, calling it a threat to middle class Americans and the elderly.

Senate Democratic leaders pronounced the legislation "dead on arrival" in that chamber. Senator Patty Murray, a Democrat from the western state of Washington, called the House bill a "colossal waste of time."

"It is truly unbelievable that they are playing these games with the clock ticking to a financial crisis," Murray said.

In his last remarks to reporters, President Obama said he would urge Republicans and Democrats to start crafting a plan that can move forward in time to avert a government default on August 2.

"My hope is that we can start gathering everybody, over the next couple of days, to choose a clear direction and to get this issue resolved," Mr. Obama said.

The White House clarified late Wednesday that any short term debt ceiling compromise would be of only a few days duration, and would have to be linked to a larger deficit reduction deal.

White House spokesman Carney likened the challenge facing Mr. Obama and congressional leaders to choosing which train to ride of several that have left the station, adding that the choice must at minimum ensure that the debt ceiling can be raised.

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