Grim jobs report casts shadow over debt talks

Countering with a typical Democratic view, Sen. Sheldon Whitehouse of Rhode Island said: "It's pretty clear that in this time of economic distress, attacks on Social Security and on Medicare are really wrong for the country."

On health care, negotiators have been closing in on cuts of about $200 billion over 10 years, about equally divided between Medicare and Medicaid, with most of the burden falling on individual industries such as hospitals, drug manufacturers and nursing homes.

One Social Security proposal on the negotiating table would lower annual cost of living increases, reducing the retirement benefits for older Americans over the long term.

Democrats, led by Pelosi, say they will not countenance any Social Security change that reduces benefits. But given the opportunity to label a lower cost of living adjustment as a benefit cut on Friday, Pelosi declined to do so. She said that any savings in Social Security would have to be funneled back into the trust fund that finances the retirement program.

Republicans have showed some new flexibility on the closing of tax loopholes and ending of corporate tax breaks that Obama has demanded. But they say any revenue generated by those steps would have to be used to lower tax rates and simplify the tax system. Such a step would require a major overhaul of the tax code and could not be accomplished in the few weeks left before the Aug. 2 debt ceiling deadline.

Rep. Jack Kingston, R-Ga., said that if Obama and Boehner can agree on an ambitious plan to tackle the nation's debt crisis, many lawmakers of both parties would strongly consider it despite having to swallow elements they strongly oppose.

He said House Republicans might support tax increases that derive mainly from closing unpopular loopholes. "If it's the underbrush of the tax code," it might not be too difficult, he said.