An urgent Saturday morning White House debt talks meeting between President Obama and Congressional leaders ended after less than an hour, with both sides remaining in a stand-off and pledging to keep working through the weekend.
President Obama continued to press the leaders for a grander bargain rather than a short-term extension of the debt ceiling so the nation would not default, arguing that such a stopgap step could cause the country’s credit rating to be downgraded, harming the economy and causing every American to pay higher credit cards rates and more for home and car loans.
“As the current situation makes clear, it would be irresponsible to put our country and economy at risk again in just a few short months with another battle over raising the debt ceiling,” White House spokesman Jay Carney said in a statement after the meeting. “Congress should refrain from playing reckless political games with our economy. Instead, it should be responsible and do its job, avoiding default and cutting the deficit.”
House Speaker John Boehner (R-OH) held a conference call with rank-and-file Republicans in which he said he was hoping to forge a deal to wrangle between $3 trillion and $5 trilion in savings and would prefer to avoid falling back on the so-called “McConnell Plan” that would hand over authority to raise the debt ceiling to the President with Congress able to disapprove only with a two-thirds majority vote, according to a breaking news alert from Politico.
During the call, the Speaker also pledged to help avert a crisis in the Asian markets by making a statement within 24 hours about the status of raising the debt limit.
Senate Minority Leader Mitch McConnell (R-KY) said only that Obama wanted reassurance Saturday that there was a plan to prevent the nation from defaulting.
“The President wanted to know that there was a plan for preventing national default,” McConnell said in a brief statement. “The bipartisan leadership in Congress is committed to working on new legislation that will prevent default while substantially reducing Washington spending.”
One Democratic aide would confirm only the basics on background.
“Leaders discussed the urgency of finding a path forward this weekend and agreed that staffs would work together throughout the weekend,” the staffer told TPM.
The Saturday morning gathering followed the dramatic collapse of the debt talks Friday night when Boehner announced he was walking away from the negotiating table and accused the President of “moving the goal posts” by demanding $400 billion more in revenue raisers. Obama then convened an impromptu press conference where he fumed that Boehner he had been operating in good faith and believed they were closing in on a deal only to have the rug pulled out from under him on Friday afternoon.
Three White House officials provided a detailed outline of how the debt talks fell apart and the key differences between the two sides.
As of Thursday, Obama and Boehner had been working on a grand bargain that would produce roughly $3 trillion in savings over 10 years, the officials confirmed. But talks broke down along three major differences: the two sides were $400 billion apart on taxes, Obama rejected a last minute demand from the GOP that the deal include a repeal of the individual mandate in healthcare reform, and the two sides were still haggling over a difference of $40 billion in cuts to Medicaid, according to the White House.
McConnell and Senate Majority Leader Harry Reid (D-NV) have a scaled down proposal to raise the debt ceiling, but Obama had been pushing both sides to capitalize on opportunity to strike a far bigger deficit-reduction deal that would pare down the nation’s debt over the next ten years.
The deepest divide between Republicans, the White House and Democrats remains over producing additional tax revenue to help offset the cuts to programs near and dear to Democrats, such as Medicare. The White House agreed to punt the tax issue until after the 2012 elections if they could find a way to force Congress to act then.
One way to do it would be to institute a “trigger” in any debt-ceiling measure would automatically expire the tax cuts for the wealthy put in place during the George W. Bush administration, if Congress did not pass tax reform by a certain date.
As the two sides edged closer to an agreement this week, a bipartisan group of senators known as the Gang of Six on Thursday announced its own deficit reduction package that included roughly $1.2 trillion in tax revenue.
Republicans say the White House then upped the ante on taxes, saying it needed another $400 billion in new tax revenues. The White House contends it was always looking for a more balanced approach that would involve political risk to both parties as equally as possible.
It’s unclear whether Republicans tried to raise the stakes in response, but sometime on Thursday Boehner demanded that any deal include a wholly different sort of trigger — a repeal of the individual mandate in the healthcare reform law, including the Independent Payment Advisory Board, non-starters for the administration.
A White House official said Obama supports the idea of a tough trigger for both Democrats and Republicans but not on something wholly unrelated to the deficit and debt negotiations.
“There are a variety of other options for a trigger that the President would be willing to consider and that would be tough and effective,” the official told TPM.
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