U.S. Debt Talks Continue Tuesday With Little Progress Made

There was no breakthrough during the Monday meeting on the debt ceiling and top Democrats and Republicans agreed to meet again Tuesday, a congressional aide said.

Going into the second meeting with congressional leaders in as many days, President Barack Obama on Monday stated clearly that he will not sign a short-term extension of the federal debt ceiling, urging the leaders from both sides to compromise on taxes as well as cuts to entitlement programs.

“I will not sign a 30-day, or a 60-day, or a 90-day extension,” Obama declared in a news conference before the meeting, “that’s just not an acceptable approach.”

It’s time to “pull off the Band-Aid, eat our peas,” Obama said, emphasizing the difficult choices that confront the lawmakers in face of mounting federal deficits and debt.

“Now is the time to deal with these issues,” Obama told reporters. "If not now, when?”

The president said he was prepared to take “significant heat” from his own party on entitlement programs. He urged Republican leaders, on their part, to reconsider their reluctance to increase tax rates, a move to which GOP is strongly opposed citing it will destroy jobs.

“I agree with the president that the national debt limit must be raised and I’m glad that he made the case for it today, but the American people will not accept – and the House cannot pass – a bill that raises taxes on job creators,” said House Speaker John Boehner addressing a news conference.

“Most Americans would say that a balanced approach is a simple one: the administration gets its debt limit increase and the American people get their spending cuts and their reforms, and adding tax increases to the equation doesn’t balance anything.”

Republicans remain unconvinced of Obama’s willingness for entitlement reforms, which they say are not serious enough and will not solve the problem anytime soon.

“I want to get there. I want to do what I think in the right – the best interest of the country, but it takes two to tango and they’re not there yet,” Boehner said.

Democrats have consistently maintained that any bid to reduce the deficit would include spending cuts as well as new tax revenues.

“If you want to see an increase in government revenues then let’s grow the economy and create jobs, broaden the tax base and lower rates,” Boehner said. “Our disagreement with the president is not about closing loopholes. None of us are fond of loopholes. Our disagreement is over the idea of raising taxes on the very people that we’re asking to create jobs in our country.”

President Obama had said earlier in his news conference, “I want to be crystal clear. Nobody has talked about increasing taxes now. Nobody has talked about increasing taxes next year. What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time when they’re making billions of dollars of profit.”

According to multiple Democratic officials familiar with the meeting, Obama again made the case for a comprehensive deal at the latest meeting but also asked House Majority Leader Eric Cantor (R-Va.) to explain spending cuts in a possible smaller deal that emerged from previous negotiations led by Vice President Joe Biden, CNN reported.

Those savings totaled about $1.8 trillion, well short of the almost $2.4 trillion that the administration seeks to raise the debt ceiling by through 2012.

In the Monday meeting, negotiators were to focus their efforts on a deal in the range of $2 trillion to $2.4 trillion after Boehner announced Saturday that a large $4 trillion deficit-reduction package was no longer possible.

With another meeting scheduled for Tuesday, congressional participants were asked to bring ideas for closing the roughly $600 billion gap between negotiated spending cuts and further savings that Republicans say are necessary for a debt ceiling deal, the Democratic sources of CNN said.

The United States government is currently over $14.4 trillion in debt. The debt ceiling must be raised by August 2 to prevent a default on the nation's debt obligations.

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