Debt-limit talks: As Obama, Boehner rush to strike deal, Democrats are left fuming

Since then, with polls showing increasing public annoyance with GOP intransigence, Cantor has signaled that his views on a grand bargain are in flux. So Boehner restarted talks with the White House. The White House, in turn, according to congressional sources, dropped its demand for a big upfront concession from Republicans: an agreement to immediately extend tax cuts enacted under President George W. Bush for middle-class households, leaving cuts benefiting the wealthiest households to expire on schedule next year.

Democrats said this element of the deal would have given them leverage against Republicans to force a rewrite of the tax code that raises revenue. Republican leaders are insistent on extending tax cuts for the highest earners, including many entrepreneurs and business owners. If that part of the bargain were taken off the table, the aides said, Democrats see no guarantee that Republicans would actually agree to an overhaul of the tax code that raises revenue.

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President Obama and Congress are still in talks to keep the U.S. from defaulting on its debt, though a report that a potential deal had been made was met with ire. (July 22)

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Democratic Senate leaders warned the Republican-controlled House, meanwhile, that time is running out for a comprehensive deal that would include raising the federal debt limit. They urged the House to remain in session and to ignore “extreme right-wing ideologues” who reject compromise.

A day after the White House signaled that Obama would accept a short-term hike in the debt ceiling if it gave lawmakers time to finalize a comprehensive deal, Reid condemned the House GOP leadership for reversing course on a plan to remain in session through the weekend and instead take Saturday and Sunday off.

Reid said it would present “a very bad picture” if House members leave town this weekend without a deal. He noted that, under congressional rules, a bill that involves revenue would have to start in the House, meaning a deal such as that sought by Obama and Boehner could not begin moving through Congress until next week.

In separate floor remarks, Sen. Charles E. Schumer (N.Y.), the third-ranking Democrat in the Senate, asked whether the United States would allow itself “to be driven into default and financial calamity by a small group of extreme right-wing ideologues in the House GOP.”

Charging that House Republicans are “becoming increasingly isolated,” Schumer urged them to seize a “life line” thrown to them by Grover Norquist, president of Americans for Tax Reform, who was quoted in a Washington Post editorial Thursday as telling the paper’s editors that the elimination of a tax cut or special-interest tax break would not necessarily amount to a tax increase.

However, Norquist backed away from the reported remarks Thursday, saying his influential group would oppose any move to allow the 2001 and 2003 tax cuts by the Bush administration to expire as currently scheduled. He asserted that expiration of the cuts would amount to a tax increase.

As the contentious budget talks dragged on, White House spokesman Jay Carney said Wednesday that Obama could accept an extension of the debt limit by “a few days” if it allowed a long-term deficit-reduction and debt-ceiling deal to work its way through Congress. Obama had pledged to veto any short-term measure to raise the debt ceiling.

Staff writer Felicia Sonmez contributed to this report.