President Barack Obama called congressional leaders back to the White House for another round of budget talks today, telling them during a testy meeting Sunday that they will gather daily until a deal is reached, Democratic and Republican officials said.
In a bid to take his case to voters, the president also will hold a press conference Monday morning, the White House announced at the conclusion of the meeting.
During a 75-minute session Sunday at the White House, Obama told the congressional leaders that America is not a “banana republic,” so he won’t agree to several months-long debt increases that raise fears of a default, according to two Democratic officials familiar with the meeting.
The president argued several times that negotiators should work toward a $4 trillion package for reducing the deficit rather than the smaller one favored by Republicans, calling on them to stand up to their base to get it done. He said both parties would suffer politically, but they need to do something substantial, said a third Democratic official familiar with the meeting.
“If not now, when?” the president said to the group, according to the official.
House Majority Leader Eric Cantor (R-Va.), who spoke most often for the Republicans, argued that a grand bargain that includes new tax revenue would not pass the House, so they should fall back to the $2.5 trillion framework from the talks led by Vice President Joe Biden.
The meeting, which featured several sharp and frustrated exchanges, broke without settling much other than negotiators’ plans for their next meeting, according to multiple Republican and Democratic officials briefed on the session.
The setback in the talks comes only three weeks before the Aug. 2 deadline for lifting the debt limit, raising the possibility of a default if Democrats and Republicans fail to make progress soon on a deficit-reduction package, which would be paired with the debt vote.
Treasury Secretary Timothy Geithner said earlier Sunday that an agreement is needed by the end of next week to allow time for Congress to pass it.
At the outset of the White House session, one journalist asked, “Can you work it out in 10 days?”
Obama replied: “We need to.”
During the meeting, Obama challenged the Republican leaders’ contention that a deal worth about $2.5 trillion would face a smoother path in the House, reminding them that they had said it would be difficult. He told the Republicans that if they think it’s easier to pass a smaller package, then they need to return Monday with a plan for how they would do it, according to the third Democratic official.
House Speaker John Boehner (R-Ohio) said he agrees with the president that a big deal is preferable but that there is no path for it, said a Republican official briefed on the meeting.
Republicans also argued that there isn’t enough time to complete the grand bargain – a claim that annoyed the president, according to one source.
Cantor and Senate Minority Whip Jon Kyl (R-Ariz.), who also spoke frequently during the meeting, tried to steer the discussion back to the Biden framework as a viable alternative, sources said.
But Biden and Obama disagreed with the Republicans that the Biden talks had produced any kind of ready-made agreement. They told Republicans that they wouldn’t be able to take all the spending cuts without balancing them out with revenue increases, sources said.
The Biden group identified deficit reduction in the range of $1.7 trillion to $2 trillion in savings. But that leaves a gap of $400 billion to $700 billion to be filled, and Democrats have argued strongly that revenue increases must be part of the mix. Republicans are expected to make the argument throughout the week that the cuts alone from the Biden group are enough to raise the debt cap through 2012, a requirement of the president’s.
Biden suggested that Boehner might move off his requirement to match an increase in the debt limit with a dollar-to-dollar target for deficit reduction, a Republican official said, but the speaker rejected the idea.
Democrats, including the president and Senate Majority Leader Harry Reid (D-Nev.), expressed frustration that they are willing to tackle their sacred cows – Medicare, Medicaid and Social Security – but Republicans will not budge on taxes, officials said.
Reid complained that during crunch time for big decisions, Republicans walk away, whether the moment involves the Senate Gang of Six talks, the Biden talks or the Obama-led negotiations, one source said.
After the meeting ended, House Minority Leader Nancy Pelosi said in a statement: “We came into this weekend with the prospect that we could achieve a grand bargain. We are still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.”
She added: “This package must do no harm to the middle class or to economic growth. It must also protect Medicare and Social Security beneficiaries, and we continue to have serious concerns about shifting billions in Medicaid costs to the states.”
Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), took aim at Democrats’ desire to shelter entitlement programs.
“The members will meet again tomorrow, though it’s disappointing that the president is unable to bring his own party around to the entitlement reform that he put on the table,” Stewart said Sunday. “And it’s baffling that the president and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits.”
The dueling statements illustrate the deep divisions that remain between Obama and eight congressional negotiators.
The administration had hoped that by acting more boldly and putting more options on the table, it would be easier for the two sides to come together on a package aimed at the reducing the deficit – and at stimulating the lagging economy.
“Small deals are very tough too because it requires very difficult reforms, savings, cuts and things people depend on that matter. Very hard to do a small deal too,” Geithner said on NBC’s “Meet the Press.” “We have to find a way to pass an agreement, but the president’s going to keep working towards the largest possible deal we can do because that’s the right thing for the country.”
Rep. Chris Van Hollen (D-Md.), appearing on CNN’s “State of the Union,” said the Biden talks identified only about $1 trillion in spending cuts. Democrats would agree to those cuts only if certain tax loopholes were closed, such as tax breaks for corporate jet owners and subsidies for oil and gas companies.
“Our Republicans colleagues are dreaming if they think we had $2.4 trillion in cuts,” said Van Hollen, a participant in the Biden talks.