(Photo: Reuters/Jonathan Ernst)
The White House negotiation among President Obama and congressional leaders over raising the nation's debt limit ended after 75 minutes today, with only an agreement to continue negotiations on Monday.
Negotiations took a turn on Saturday night after Speaker of the House John Boehner (R-Ohio) announced that a large $4 trillion deficit reduction package was no longer possible. Negotiators will now have to refocus their efforts on a much smaller deal, perhaps in the range of $2 trillion to $2.4 trillion.
In some ways, the larger $4 trillion package would have been easier to negotiate than a smaller deal because there are more pieces that can be negotiated with for a compromise. Once tax reform, entitlement spending, and defense spending are taken off the table, however, negotiators are left with only a small part of the budget to work with.
Treasury Secretary Timothy Geithner made a similar point on “Meet the Press” on Sunday.
“Small deals are very tough too because it requires very difficult reforms, savings, cuts in things people depend on, that matter; very hard to do a small deal too,” he said.
The differences between the two parties on a debt ceiling deal were on display in Sunday morning's talk shows. On Fox News Sunday, Senator Jim DeMint (R-S.C.) said, “I'm not optimistic. I think the president's been gaming Republicans. He's been talking about this for six months and the only proposal he has sent us is his proposal to raise the debt $10 trillion so it’s hard to take him seriously here.”
Geithner, again on “Meet the Press”, took a different view, saying, “Why is it fair to ask elderly Americans, middle class families, to take more of the burden if those savings are going to go to sustain special interest tax breaks, the lowest tax rates for the most fortunate Americans we've seen in 50 years? Why is that fair?”
Geithner also said that Obama is still pushing for the larger $4 trillion measure.
“The president is gonna keep working towards the largest possible deal we could do 'cuz that's the right thing for the country,” he said.
After today's meeting, sources confirmed with Roll Call reporter Steven Dennis that Obama still wants the biggest deal possible. But House Majority Leader Eric Cantor (R-Va.) will not accept any changes in the tax code that generate revenue unless they are offset with reductions in tax rates.
A senior aide at the meeting told Meredith Shiner, a reporter for The Hill, that tomorrow's meeting will go over what was accomplished in the congressional meetings with Vice President Joe Biden and “see how much is there.” President Obama will hold a press conference at 11 a.m. Monday before talks resume some time in the afternoon.
The United States government is currently over $14.4 trillion in debt with over $114 trillion in unfunded liabilities. Geithner has said that the debt ceiling must be raised by August 2 to prevent a default on the nation's debt obligations.