Boehner: No ‘imminent deal’ on debt

House Speaker John A. Boehner (R-Ohio) on Friday tried to tamp down expectations of an ambitious but politically painful plan to raise revenue and make changes to popular federal retirement programs, saying there’s no “imminent deal” on the national debt in advance of a key weekend summit at the White House.

A day after siding with President Obama’s push for a massive restructuring of federal spending and the tax code, Boehner suggested that Republicans and Democrats remained far apart on the critical issues.

His remarks leave in doubt the chances to cinch a grand bargain in time for the looming Aug. 2 deadline to avoid the nation’s first default on its outstanding debts.

Obama, in brief remarks about a disappointing report on job growth in June, stressed that reaching a debt-reduction deal and raising the federal limit on borrowing are key factors in encouraging businesses to create more jobs. He said “uncertainty” over raising the debt limit was among several issues that have “made businesses hesitant to invest more aggressively.”

To put the U.S. economy on a stronger footing, “we’ve got to rein in our deficits and get the government to live within its means,” while still making investments that create jobs and boost U.S. competitiveness, Obama said.

“The sooner that the markets know that the debt limit ceiling will have been raised and that we have a serious plan to deal with our debt and deficit, the sooner that we give our businesses the certainty that they will need in order to make additional investments to grow and hire,” he said.

But the reported outlines of a deal raised tensions Friday between the White House and congressional Democrats, with party leaders and rank-and-file members alike fuming at reports that Obama is considering cuts to Social Security and Medicare as part of the bargain.

Sen. Bernard Sanders (I-Vt.) and Sen. Sheldon Whitehouse (D-R.I.) joined several speakers representing more than 300 organizations in denouncing the proposed cuts Friday in a conference call with reporters.

“I think they’re making a grievous mistake if they think they can just present anything to us and assume that because we’re Democrats, we’ll go along with what the president has capitulated to,” Whitehouse said.

As Obama and a bipartisan group of lawmakers prepared for the Sunday summit at the White House, Rep. Eric Cantor (R-Va.), the House majority leader, announced the cancellation of a recess originally scheduled for later this month. He advised members that the House would be in session the week of July 18.

“It’s not like there’s some imminent deal,” Boehner told reporters Friday morning. At one point he held his arms far apart to demonstrate the distance between the two sides, alluding to the fact that increased tax revenues face steep political hurdles in the Republican-controlled House and deep cuts to entitlements face staunch opposition in the Democratic-controlled Senate.

“I don’t think this problem has narrowed at all in the last several days,” he said, likening the task of finding a solution to a Rubik’s Cube.

Negotiations entered a critical phase Thursday at a White House meeting in which Obama challenged congressional leaders to embrace a broad deal that would save as much as $4 trillion over the next decade by overhauling the tax code and tackling all the major drivers of federal spending, including the Pentagon and health and retirement programs.

Obama praised the meeting as “very constructive” and said leaders would convene again Sunday “with the expectation that, at that point, the parties will at least know where each other’s bottom lines are” and will be able to “start engaging in the hard bargaining that’s necessary to get a deal done.”

Obama said the parties “are still far apart on a wide range of issues.” He continued, “But, again, I thought that all the leaders here came in a spirit of compromise, in a spirit of wanting to solve problems on behalf of the American people.”

Time to solve those problems is rapidly running out. The nation faces default Aug. 2 unless Congress acts to raise the legal limit on government borrowing, and Republicans and Democrats alike are demanding that any increase in the $14.3 trillion debt limit be accompanied by a significant debt-reduction plan.

Such a plan would be complicated both politically and substantively, and aides said Senate leaders in both parties are skeptical that such a deal could come together in the next few days.

On Friday, Boehner’s top lieutenants, one by one, denounced any broad-based increase in taxes, giving voice to the difficulty ahead in finding the right balance in negotiations to please enough lawmakers from each side of the aisle to support the nascent plan.

“There is no way the House of Representatives will support a tax increase,” Cantor said Friday at a GOP leadership press conference. That was was echoed by the No. 3 Republican, Majority Whip Kevin McCarthy (R-Calif.): “This is not a time to talk about raising taxes.”

After the Thursday meeting at the White House, Boehner made his own pitch to reluctant Senate Republicans, arguing in a closed-door luncheon that securing the nation’s economic future requires bold action. Boehner also said he expects a deal to come together quickly — or to collapse under the weight of partisan resistance.

“He is always an optimistic man, and he was optimistic today,” said freshman Sen. Roy Blunt (R-Mo.), who served for three years under Boehner in House leadership. “I think if they can get there, they’ll get there pretty quickly — or they won’t get there.”

Senate Majority Leader Harry M. Reid (D-Nev.) warned administration officials that a deal must be sealed by the end of next week to give congressional leaders enough time to draft the legislation, submit it to congressional budget analysts and marshal the votes before the Aug. 2 deadline, aides said.

Although Senate leaders have not publicly rejected the grand plan, they have been privately cautious and offered suggestions that a medium-range plan, saving less than $2.5 trillion, might be more politically realistic.

Reid declined to comment on the talks when he returned to the Capitol at midday Thursday, and his Republican counterpart offered only a modest level of support.

“We had a good conversation, and the talks will continue,” Senate Minority Leader Mitch McConnell (R-Ky.) told reporters.

At the White House meeting, Cantor and Senate Minority Whip Jon Kyl (R-Ariz.) also expressed doubts about a big deal, according to Republican sources.

And even as House Minority Leader Nancy Pelosi (D-Calif.) pledged to back the president’s quest for an ambitious plan to stabilize the nation’s finances, she bluntly rejected cuts to benefits for recipients of Social Security and Medicare, telling reporters: “We are not going to balance the budget on the backs of America’s seniors, women and people with disabilities.”

Both programs would be affected under the framework Obama envisions. One option, a proposal to change the measure of inflation used to calculate Social Security payouts, could affect benefits for current retirees.

Obama plans to meet privately with Pelosi on Friday to address rising Democratic anxiety.

In private talks with the White House, Boehner has discussed various options for tax policy. One idea under discussion, according to aides in both parties, is a proposal to jump-start a thorough rewrite of the tax code.

Under that scenario, Republicans would agree to extend the Bush-era tax cuts for the middle class, leaving open the possibility that the Bush tax cuts that benefit the nation’s wealthiest households would expire next year. That would be a huge win for Democrats, who have long pledged to end tax breaks for the wealthy.

In return, Democrats would agree to a rewrite of the tax code that would eliminate dozens of tax breaks and use the cash to lower income tax rates, a GOP priority. But skeptical aides in both parties said it would be difficult to craft a mechanism that could force lawmakers to follow through.

Democrats are also skeptical that Republicans would agree to tax changes that would produce significant new revenue. To accept spending cuts that could exceed $3 trillion over the next decade, many Democrats want as much as $1 trillion in fresh revenue — a major concession that neither Boehner nor any other Republican has been willing to make.

Still, people briefed on talks at the White House said the big deal sought by Obama has emerged as the most popular option. In the meeting Thursday, Obama said he would not sign a small deal that fails to persuade lawmakers to raise the debt limit sufficiently to cover the nation’s bills through the end of next year. The only other option is to return to the medium-sized package that was under discussion in bipartisan talks led by Vice President Biden.

That package aimed to produce about $2.4 trillion in savings over the next decade. But it’s not clear that the Biden approach offers a safe fallback.

The Biden talks broke up when Republicans pulled out, insisting that they could not support higher taxes in any form.

Staff writer William Branigin contributed to this report.

Paul Kane covers Congress and politics for the Washington Post.
Lori Montgomery covers U.S. economic policy and the federal budget, focusing on efforts to tame the national debt.
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