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Published: Saturday, 7/23/2011

President, speaker trade barbs on debt talks

McCLATCHY NEWSPAPERS

WASHINGTON — Deficit reduction talks between President 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 on Aug. 2.

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

The President and House speaker are publicly blaming one another for the collapse.

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

Mr. Boehner said the President had no plan.

Mr. Obama said he did and he outlined it Friday.

Mr. Obama also summoned Mr. Boehner and other congressional leaders to the White House Saturday morning for a meeting.

Mr. Boehner said he would attend.

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

The two men offered sharply different accounts of the compromise efforts and who was at fault for the collapse.

“I’ve been left at the altar now a couple of times,” Mr. Obama said Friday evening.

“It’s the President who walked away from his agreement,” Mr. Boehner said.

The speaker said Mr. Obama wanted higher taxes and not enough spending cuts.

The President countered that he had offered an “extraordinarily fair deal” that totaled $2.6 trillion in spending cuts and $1.2 trillion in additional revenue.

“It is hard to understand why Speaker Boehner would walk away from this kind of deal,” the President said.

Strikingly, the two sides had agreed on two highly controversial changes, according to aides on both sides of the talks. One would raise the age of eligibility of Medicare gradually from 65 to 67 for future beneficiaries, while the other would slow the increase in cost-of-living raises in Social Security checks.

Mr. Obama has been trying for weeks to work with Mr. 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 included private conversations between the two men and five days of bipartisan negotiations at the White House.

The apparent collapse of the talks means that the effort to prevent a U.S. default will enter a new phase.

Instead of using the crisis of a debt ceiling deadline to force both sides to devise a large-scale deficit reduction package, the emphasis now will be on simply ending the crisis before Aug. 2.

Saturday they will in essence have to find a way to raise the debt ceiling quickly.

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.

Mr. Boehner sent his letter Friday. “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 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.”

Mr. Obama 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.”

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 cut from Medicare.

The officials said Mr. Obama called Mr. Boehner to tell him the two could work out the details, but Mr. Boehner didn’t call back.

Mr. Obama said he also offered another $650 billion in cuts to entitlement programs such as Medicare, Social Security, and Medicaid.

He described the revenue offer as $1.2 trillion in additional revenue, which, Mr. 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.”

Mr. 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.”

Shortly after the President spoke, Mr. Boehner accused the White House of shifting the goalposts at the last minute, demanding more revenue.

The developments occurred hours after the Senate voted 51-46 along party lines to kill the House-passed “cut, cap and balance” legislation. That bill would have cut spending by as much as $6 trillion over a decade and required Congress to send a constitutional amendment to balance the budget to the states for ratification conservatives’ price for raising the debt limit.



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