Endgame talks: Obama, House Republicans meet anew

By David Espo

Associated Press

Published: Thursday, July 21 2011 12:00 a.m. MDT

Sen. Roy Blunt, R-Mo., left, walks off of the stage after speaking at a news conference on the debt ceiling on Capitol Hill in Washington, Thursday, July 21, 2011. Blunt was joined by, from right, Sen. Jim DeMint, R-S.C., Sen Bob Corker, R-Tenn., Sen. Tom Coburn, R-Okla., and Rep. Reid Ribble, R-Wisc.

Susan Walsh, Associated Press

WASHINGTON — In secretive endgame negotiations, President Barack Obama and House Republican leaders reached anew on Thursday for an elusive "grand bargain" deal to cut deficits by $4 trillion or more and prevent a threatened Aug. 2 government default, officials said.

House Speaker John Boehner declared that his rank and file generally stood ready to compromise in order to reach an agreement as a way of "getting our economy going again and growing jobs.

Still, 12 days before the default deadline, officials stressed that no compromise appeared imminent. And new hope of one ran instantly into old resistance: from Republicans opposed to higher taxes and Democrats loath to cut Medicare and other benefit programs.

While talks on a major, long-term agreement continued, a fresh, shorter-term backup plan appeared to be gaining momentum. Under discussion among some House Republicans, that proposal would cut spending by $1 trillion or slightly more immediately and raise the debt limit by a similar amount — enough to postpone a final reckoning until early in 2012.

Both sides maneuvered for political advantage and for leverage in negotiations about which little was publicly known.

"At the end of the day, we have a responsibility to act," said Boehner of GOP lawmakers,

Across the Capitol, however, Senate Majority Leader Harry Reid blamed some of the same Republicans — "tea party extremists," he called them — of blocking a deal.

The sometimes-conflicting information underscored the frenzied final days before a threatened default, when the Treasury would no longer be able to pay all its bills in full and the economy could go into a tailspin as interest rates spiked.

Some Democrats confided they were worried Obama would sign off on an agreement that cuts benefit programs without raising tax revenue, and they peppered Budget Director Jack Lew — in a closed-door meeting in the Senate — with questions about the high-level negotiations.

The president has said publicly he wants a deficit-reduction plan that includes both, and Reid pointedly reminded him that was the case.

"My caucus agrees with that — and hope the president sticks with that, and I'm confident he will," the Nevada Democrat said.

Within hours, he and other senior Democrats in both houses were on their way to the White House to meet again with Obama.

One official said the White House had notified Democratic congressional leaders Wednesday night that Obama and the House leaders appeared to be were closing in on a deal that is said to include $3 trillion in spending cuts but only a promise of higher revenues.

Boehner's office and the White House said that account as overblown in part and inaccurate in part. Some Republicans charged it had been spread to anger Democrats and torpedo any possibility of a deal that would cut Medicare or Social Security.

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

Another Democratic official said that in fact progress had been made, but Boehner's office declined to say as much.

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

The government's debt stands at a record $14.3 trillion and has been growing by more than $1 trillion a year. Obama's request for an increase prompted Boehner to say months ago that any rise must be accompanied by spending cuts of at least the same amount.

Publicly, some Republicans insisted they would not entertain any fallback measure as long as a separate House-passed bill was pending in the Senate.

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