President Obama on Tuesday rejected calls for a short-term increase in the legal limit on government borrowing and summoned congressional leaders to the White House to restart negotiations over a long-term plan to restrain the deepening national debt.
With an Aug. 2 deadline closing in, Obama urged lawmakers in both parties to break the stalemate that halted talks nearly two weeks ago and seize what he called “a unique opportunity to do something big” to rebalance the nation’s finances.
Motion graphic: A guide to understanding the federal debt
Running in the red
“There may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term but then want to kick the can down the road when it comes to solving the larger problem of our deficit. I don’t share that view,” Obama told reporters during a late-afternoon appearance at the White House.
With the surprise announcement, Obama sought to take charge of a situation that was rapidly devolving into a dangerous game of chicken: Republicans have refused to discuss any debt-reduction deal that includes higher taxes, while Democrats have rejected any deal based solely on spending cuts.
The president also struck a more conciliatory tone than he did in a news conference last week, when he ridiculed Republicans’ work ethic and accused them of seeking to prevent the super-rich from making sacrifices alongside those who stand to suffer from unprecedented cuts to federal programs.
Obama said he “made progress” in talks with congressional leaders over the Fourth of July weekend. He met with House Speaker John A. Boehner (R-Ohio) on Sunday at the White House. On Tuesday, the president invited the top two leaders from each party in the House and Senate to come to the White House on Thursday to “drive towards a final agreement.”
“It’s my hope that everybody is going to leave their ultimatums at the door,” he said.
Polls show that Americans largely disapprove of Obama’s handling of the economy, and failing to reach a debt-reduction deal could make the president more vulnerable leading into the 2012 election.
Republicans reacted warily to the creation of a new negotiating structure and to Obama’s suggestion that the parties produce the biggest debt-reduction package of the past two decades over the next two weeks. They said they would attend the Thursday summit but offered little hope for progress as long as higher taxes are on the table.
“We’re not dealing just with talking points about corporate jets or other ‘loopholes.’ The legislation the President has asked for — which would increase taxes on small businesses and destroy more American jobs — cannot pass the House, as I have stated repeatedly,” Boehner said in a statement. “I’m happy to discuss these issues at the White House, but such discussions will be fruitless until the President recognizes economic and legislative reality.”
The battle over the debt limit, which has dominated debate in Washington for much of the spring, is set to intensify to code-red levels. Treasury Secretary Timothy F. Geithner has said he will run out of money to pay the nation’s bills — forcing the first government default in U.S. history — unless Congress acts to increase the $14.3 trillion limit by Aug. 2. The Treasury needs a little more than $2 trillion in fresh borrowing authority to cover the government’s needs through the 2012 election.
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