Obama, meanwhile, called on lawmakers to "leave their ultimatums at the door," but he stuck to his — that any deal must include new tax revenue. "We need to take on spending in the tax code, spending on certain tax breaks and deductions for the wealthiest of Americans," Obama said. The White House is proposing about $400 billion in increased tax revenues.
All told, lawmakers and the administration are seeking deficit cuts in the range of $2.4 trillion over the coming decade to balance a similar increase in the debt limit — enough to keep the government afloat past the November 2012 election. Currently the debt limit is $14.3 trillion.
The administration says that if the government's borrowing limit is not increased by Aug. 2, the U.S. will face its first default ever, potentially throwing financial markets into turmoil.
Many congressional Republicans indicate they're unconvinced that such scenarios would occur, and some administration officials worry that it could take a financial calamity before Congress acts.
With the deadline nearing, the Senate canceled its July Fourth recess planned for this week.
In discussions led by Vice President Joe Biden that broke off late last month, Republican and Democratic negotiators found more than $1 trillion in potential spending cuts over the coming decade, including reductions favored by both sides.
A Democratic official said last week that of those cuts, roughly $200 billion would come mainly from savings from Medicaid and Medicare, the government health insurance programs for the poor and elderly. Another $200 billion would come from cuts in other automatically paid benefit programs, including farm subsidies. Another large chunk would come from cuts in discretionary spending that Congress approves every year.
Associated Press writers Julie Pace and Ben Feller contributed to this report.
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