Obama summons GOP, says no to short-term debt deal

By Erica Werner

Associated Press

Published: Tuesday, July 5 2011 4:25 p.m. MDT

President Barack Obama makes a statement to reporters about debt ceiling negotiations, Tuesday, July 5, 2011, in the James Brady Press Briefing Room of the White House in Washington.

Manuel Balce Ceneta, Associated Press

WASHINGTON — President Barack Obama prodded Congress Tuesday to reach a sweeping long-term deal within two weeks to raise the nation's borrowing limit rather than "kick the can down the road" with a makeshift, short-term solution to stave off default. And he declared the agreement must include the tax hikes Republicans strongly oppose.

Obama said he was summoning leaders of both parties to the White House on Thursday to try to get it done and beat an Aug. 2 deadline to avert a financial crisis that could shake economic markets worldwide.

Republicans sounded entirely unimpressed with Obama's insistence that an attack on federal deficits include tax increases for the wealthy and narrowed loopholes for oil companies as well as big cuts in government spending.

"We're not dealing just with talking points about corporate jets or other 'loopholes,'" said House Speaker John Boehner. "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 he'd be happy to join discussions at the White House but predicted they "will be fruitless until the president recognizes economic and legislative reality."

Obama said he opposed a stopgap, short-term increase, as suggested by some lawmakers. But he stopped short of ruling out a limited extension, and his spokesman Jay Carney later declined to say whether the president would veto such a measure.

Obama renewed his stand that any deal must include not only spending cuts but also new revenue — tax increases vehemently ruled out by many Republicans in Congress.

"We need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people," Obama said at the White House.

"We've made progress, and I believe that greater progress is within sight, but I don't what to fool anybody — we still have to work through some real differences," the president said.

He said congressional leaders from the House and Senate, both Republicans and Democrats, were being invited to meet on the issue Thursday at the White House. That would bring the top eight lawmakers together with Obama and top administration financial officials.

Obama spoke as the Aug. 2 deadline for raising the nation's borrowing limit came closer. Experts say lawmakers must waste no time in making a deal if they are to have any chance of getting it finalized and passed through both chambers of Congress in time.

Despite the president's optimism, it remained unclear where compromise could be found. Republicans are insisting they will note vote to raise the debt limit without major spending cuts; Democrats are refusing to sign off on cuts of such magnitude without at least some tax increases as well. Republicans say they won't sign off on any tax hikes at all, including those Obama wants targeting the wealthiest Americans or closing loopholes to corporations.

Underscoring the differences, aides to Boehner and Senate Minority Leader Mitch McConnell, R-Ky., even disputed Obama's claim that progress had been made over the weekend after, as Obama put it, "my team and I had a series of discussions with congressional leaders in both parties."

McConnell spokesman Don Stewart said there were no such discussions over the weekend that McConnell or any of his staff members were involved in, while a Boehner aide said there were no meetings, though he couldn't rule out phone calls. Carney declined to provide any details.

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