Debt Talks Between White House, GOP Leaders Collapse

Deficit reduction talks between President Barack Obama and House Speaker John Boehner broke down Friday after the Ohio Republican refused to participate, raising serious questions about how Washington can find a way to avoid a government default in 12 days.

“In the end, we couldn’t connect. Not because of different personalities, but because of different visions for our country,” Boehner said in a letter to his Republican House of Representatives colleagues. “The president is emphatic that taxes have to be raised.”

The letter triggered an unusual evening of Obama and Boehner publicly — and bitterly — blaming one another for the collapse.

Obama complained that he “couldn't get a phone call returned” Friday morning, while Boehner compared dealing with the White House to dealing with a “bowl of Jell-O.”

Boehner said Obama had no plan; Obama said he did, and he outlined it Friday. And, he insisted, “It is hard to understand why Speaker Boehner would walk away from this kind of deal.”

Obama summoned Boehner and other congressional leaders to the White House Saturday morning. Boehner said he would attend.

“We have run out of time,” he said tersely, “and they are going to have to explain to me how it is that we are going to avoid default.”

And he wants answers.

“I expect them to have an answer in terms of how they intend to get this thing done in the course of the next week,” the president said.

Obama has been trying for weeks to develop a relationship with Boehner, the nation's most powerful Republican, and craft a deal to cut spending that would win approval from the GOP-majority House. Talks have taken several forms, including private conversations between the two men and five days last week of bipartisan negotiations at the White House.

Saturday, they'll in essence have to start again and find a way to raise the debt ceiling quickly.

It was suddenly unclear how the dispute will be resolved, as the government inches closer to a historic default. If the nation's $14.3 trillion debt ceiling is not raised by Aug. 2, the government will run out of borrowing authority, igniting panic in financial markets and possibly sending the American economy back into recession.

The White House on Thursday had floated a plan to cut spending by about $3 trillion, with no immediate revenue increases, and Republicans were saying they hoped to have a plan ready for a House vote by Wednesday.

Republicans have a 240-193 House majority, and conservatives who dominate the GOP caucus have been adamant that they won't approve any kind of tax increases. They have not been warming to suggestions that revenue could be raised without increasing rates — with loophole closings, for instance.

Boehner, apparently sensing little movement among most of his caucus, late Friday sent his letter, saying, “I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward.”

He said that during weeks of bipartisan talks, “it became evident that the White House is simply not serious about ending the spending binge that is destroying jobs and endangering our children’s future. A deal was never reached, and was never really close.”

Stay informed with Truthout updates delivered straight to your email inbox. Click here to sign up.

Obama quickly went to the White House briefing room and laid out his plan for the first time.

He described his proposal — “essentially what we offered Speaker Boehner was over $1 trillion in cuts to discretionary spending, both domestic and defense.” Discretionary programs can include education, transportation and other popular programs.

The two sides agreed on about $800 billion in cuts but were unable to reach an accord on another $400 billion. The White House thought the Republicans were asking for too much to be cut from Medicare.

Senior White House officials told reporters that the two parties had reached “great zones of agreement” but that three sticking points needed to be worked on by Obama and Boehner. Among them, the White House call for $400 billion more in tax revenue to balance the cuts the GOP was seeking, as well as GOP insistence that the tax breaks be tied to repealing part of Obama's health care law. The officials, who spoke on condition of anonymity because of the sensitivity of the talks, said Obama called Boehner to tell him the two could work out the details, but Boehner didn't call back.

Obama said he also offered another $650 billion in cuts to entitlement programs like Medicare, Social Security and Medicaid — a tough political offer for Democrats, who have long vowed to make sure such programs are not dramatically changed.

He described the revenue offer as $1.2 trillion in additional revenue, which, Obama said, “could be accomplished without hiking … tax rates.” The money would be raised by closing some corporate tax loopholes, eliminating some deductions — he offered no specifics — and “engaging in a tax reform process that could have lowered rates generally while broadening the base.”

Obama's ire grew as he spoke. “If it was unbalanced, it was unbalanced in the direction of not enough revenue,” he said. “But in the interest of being serious about deficit reduction, I was willing to take a lot of heat from my party.”

His party stood firmly behind him Friday.

“Speaker Boehner's adult moment is long overdue,” said House Minority Leader Nancy Pelosi, D-Calif.

“Republicans have once again proven unable to overcome their ideological opposition to ending taxpayer-funded giveaways for millionaires, corporate jet owners and oil companies.” said Senate Majority Leader Harry Reid, D-Nev.

Shortly after Obama spoke, Boehner fired back. He accused the White House of shifting the goalposts at the last minute, demanding more revenue.

“We had an agreement on revenue numbers … we felt we could reach based on a flatter tax code with lower rates and a broader base that would produce more economic growth, more employees and more taxpayers,” Boehner said.

But, he charged, “the White House moved the goalpost. There was an agreement on some additional revenues until yesterday when the president demanded $400 billion more which was going to be nothing more than a tax increase on the American people.”

While Obama accused Boehner of not being serious enough on revenues, Boehner said the president “refused to get serious about cutting spending and making the tough choices that are facing our country on entitlement reform.”

“That's the bottom line,” Boehner said.

A visibly exacerbated Boehner told reporters at a hastily called news conference, “I take the same oath of office as the president of the United States, I've got the same responsibilities as the president of the United States, and I think, for both of us, to do what's in the best interest of our country.”

“This is a serious debate,” Boehner added. “It's a debate about jobs, it's a debate about our economy, and frankly it's also a big debate about the future of our country.”

© 2011 McClatchy-Tribune Information Services

Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.