Boehner: House will compromise on debt limit

By Andrew Taylor

Associated Press

Published: Thursday, July 21 2011 4:35 p.m. MDT

WASHINGTON — House Speaker John Boehner predicted Thursday that a majority of his fellow Republicans in the House will end up supporting some kind of compromise to avoid a government default. Democrats insisted that higher tax revenue be part of a deal.

White House budget chief Jacob Lew told reporters at the Capitol that "I'm unaware of a deal" between President Barack Obama and congressional Republicans and he repeated that "we've made clear revenues have to be included."

All sides pushed against media reports that Obama and Boehner were near an agreement on a grand bargain trading $3 trillion or so in spending cuts and a promise of $1 trillion in tax revenues through a later overhaul of the tax code as part of a deal to extend the government's borrowing authority.

"We're not close to a deal," White House spokesman Jay Carney said.

"While we are keeping the lines of communication open, there is no 'deal' and no progress to report," Boehner spokesman Michael Steel said.

What seems clear is that the White House and Boehner continue to negotiate in hopes of a large deficit-cutting package as an Aug. 2 deadline looms on extending the debt limit.

Obama was meeting with the top four congressional Democratic leaders — Senators Harry Reid and Richard Durbin and House members Nancy Pelosi and Steny Hoyer — late Thursday afternoon at the White House to discuss the status of the debt talks.

The Democratic-controlled Senate is all but certain to kill a tea party-backed bill passed in the Republican-controlled House of Representatives earlier this week. The legislation insists on deep government spending cuts and congressional passage of a constitutional balanced budget amendment in return for raising the U.S. debt ceiling.

Democrats are expected to kill the measure — which they say would demand debilitating cuts to a popular health care benefits program for the elderly — in a vote on Saturday if not before.

Meanwhile, momentum on a separate bipartisan budget plan by the Senate's "Gang of Six" seemed to ebb as critics warned the measure contains larger tax increases than advertised and it became plain that the measure comes too late and is too controversial to advance quickly — particularly as a part of a debt limit package that already would be teetering on a knife's edge.

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