WASHINGTON — President Obama held a 75-minute meeting with congressional leaders Sunday that failed to end the impasse over how to cut deficits. The bipartisan group agreed to reconvene this afternoon at the White House.
Congressional sources said the sides remain fixed: Democrats want a big deal, perhaps totaling $4 trillion, that includes tax increases and spending cuts. Republicans want any tax increases offset by other tax cuts.
Obama is scheduled to take his case to the American public early today at a news conference — his second on the issue in two weeks.
House Speaker John Boehner's decision on Saturday night to abandon efforts to seek the kind of grand bargain Obama wanted has not only thrown the talks into some turmoil, but also has made it appear that Republicans are setting the agenda.
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Boehner wants a deal that builds from savings discussed in talks in May and June headed by Vice President Joe Biden. Though no agreement was reached, the group is believed to have discussed packages of at least $1 trillion. The negotiators are expected to discuss those savings today.
Obama aides on Sunday sought to raise the stakes, with Treasury Secretary Timothy Geithner warning that failing to reach a deal on raising the U.S. debt ceiling could cause "catastrophic damage" to the American and global economies.
U.S. credit could be downgraded if a deal isn't reached by Aug. 2, Geithner said, complicating the government's ability to cut checks for Medicare and Social Security recipients.
Failure to reach a deal would affect "the value of all Americans' savings, the capacity of businesses to borrow to put people back to work," Geithner said on NBC's "Meet the Press." And it could affect the 80 million checks a month the government writes to government beneficiaries, "including people who depend on those checks."
A spokesman for Senate Republican leader Mitch McConnell of Kentucky said it was "disappointing that the president is unable to bring his own party around to the entitlement reform that he put on the table."
"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," spokesman Don Stewart said.
The White House has said it wants a deal in place by July 22, which would presumably calm financial markets and also give Congress enough time to consider legislation.