After months of effort, president Barack Obama and congressional Republicans are right back where they started as they try to avert a looming debt default: arguing over taxes.
With a 'grand bargain' to tame the national debt seemingly off the table, Obama, House of Representatives Speaker John Boehner and other top leaders will try for a more modest deal when they resume their discussions at the White House on Monday afternoon.
But negotiators will have to confront a divide over taxes that has prevented them from reaching a deal so far. Democrats say new tax revenues need to be part of the equation, while Republicans say they won't back any increase in taxes.
A highly anticipated Sunday meeting broke little new ground. Obama and his fellow Democrats repeated the need for a 'balanced' approach, while Republicans restated their position that tax increases would further burden the already shaky economy. Senate Democratic Leader Harry Reid lectured Republicans for backing away from tough decisions, sources said, while Boehner was largely silent.
One source familiar with the meeting described it as a 'frank exchange of views' — Washington-speak for 'acrimonious.'
The post-meeting rhetoric seemed to bear this out.
'It's baffling that the President and his party continue to insist on massive tax hikes in the middle of a jobs crisis,' said Don Stewart, a spokesman for Senate Republican Leader Mitch McConnell.
Reid's spokesman, Adam Jentleson, said: 'The stakes are too high for Republicans to keep taking the easy way out.'
Time is running short to break the impasse.
The Treasury Department has warned that it will run out of money to cover the country's bills if Congress does not raise the $14.3 trillion (8.9 trillion pound) debt limit by August 2. Failure to do so could push the country back into recession, send shock waves through global markets and threaten the dollar's reserve status.
The real deadline is even closer. Participants say a deal should be in place by July 22 to ensure Congress has enough time to act, and Obama has told lawmakers to be prepared to meet every day this week.
Aides to Boehner and Obama had spent much of the past week discussing an ambitious budget deal that would have reformed the tax code and popular social spending programs and scaled back annual defence and domestic spending.
The goal was the $4 trillion in budget savings, measured over 10 years, that budget experts say is needed to keep the national debt at a sustainable level.
Source : New Age
