WASHINGTON – President Barack Obama called on congressional leaders Wednesday to return to the White House for a scheduled meeting tomorrow, hoping to break the deadlock over the nation’s borrowing limit and its mounting debt. That issue must be resolved by Aug. 2 to avoid catastrophic financial consequences for the United States.
Officials said Wednesday that the White House believes Republican lawmakers will support new tax revenues to help reduce the long-term deficit and to increase the government’s borrowing authority. White House spokesman Jay Carney said that Obama is confident that enough lawmakers from both parties will support the deal, which would reduce the debt by $2 trillion over the next 10 years through spending cuts and tax increases.
Republican leaders, however, have been adamant in public statements that they will oppose any tax hikes.
“The president believes, we believe, that there are enough members of both parties in both houses who support the idea that a big deal has to be balanced and therefore include spending cuts in the tax code,” Carney said, employing a phrase White House officials use to describe ending tax loopholes and tax subsidies for certain taxpayers and corporations.
On Tuesday, Independent Vermont Sen. Bernard Sanders urged Obama to “stand tall” and push for “shared sacrifice” in negotiations with Republican lawmakers on raising the nation’s debt ceiling.
The Senate returned to Washington Tuesday after canceling its week-long July 4 recess to work on the deal, prodded in no small part by the president to solve the problem before the U.S. runs out of options.
But Sanders said he doesn’t believe the president has fought as hard as he should have in making it clear that the wealthiest people and large corporations have to participate in deficit reduction.
“He has got to not yield to right-wing Republican demands, who want to make massive cuts in Medicare, in Medicaid, in education, in nutrition and in virtually every program that is important to working families in this country,” Sanders said at an afternoon briefing in the Senate Press Gallery.
The senator said he will send Obama a letter signed by more than 100,000 Americans that expands on his demands for the administration.
The letter pleads that at least 50 percent of any deficit reduction package must come from revenue raised by ending tax breaks for the wealthy and eliminating tax loopholes that benefit large, profitable corporations and Wall Street financial institutions. It also calls for the inclusion of significant cuts to “unnecessary and wasteful” Pentagon spending, a divisive issue for the GOP, which has said it’s wary of cuts in military programs.
Sanders, reiterating themes from his 90-minute Senate floor speech last week, tells the president not to be “blackmailed again” by Republicans.
“In the next few years, instead of spending money on education, on rebuilding our roads and bridges, expanding broadband and hi-tech ventures across the country, we’ll be paying down interest to foreign nations,” Sen. Patrick Leahy, D-Vt., said in an email interview. “I would hope that people will come together on this.”
Obama on Tuesday called congressional leaders to the White House on Thursday for another round of negotiations and said he believed an agreement was within reach. Today, Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, released the Democrats’ budget proposal.
Sanders said he has been working with Conrad, and he thinks it is a budget that does call for shared sacrifice, and “the overwhelmingly majority of the American people will be supportive.”
Congress has raised the debt ceiling 102 times since it was first instituted in 1917, and 10 times in the last decade. The most recent time the ceiling was boosted was in February 2010. The national debt is at its highest point in 50 years, and never before has a bipartisan deal been so hard to strike.
The two parties are at sharp odds.
Republicans refuse to go along with any increase in the borrowing limit unless it includes deep spending cuts and avoids any tax increases. Democrats have also proposed spending cuts, but want to eliminate certain tax breaks and loopholes.
The Treasury Department and leading economists have warned that the country will face default if Congress does not lift the debt ceiling. The U.S. is technically operating just below the $14.3 trillion legal borrowing limit. The Treasury Department says that on Aug. 2 it will run out of money to pay the nation’s bills in full and on time.
The White House last week said that negotiators will need to reach agreement by July 22 so that legislation can be passed in time.
So far, the Obama administration has agreed to a deal that would reduce the deficit by $2.4 trillion with $2 trillion coming from spending cuts and $400 billion coming from tax increases, which would be about 17 percent of the final deal. This, however, is still higher than the 15 percent increase on taxes laid out by the Republicans on the Joint Economic Committee back in March.
On Wednesday afternoon, President Obama took his economic message to a Twitter town hall, which took place in the East Room of the White House. In response to a question about the deficit, Obama said: “My expectation is that within the next two weeks, Congress and the White House will come up with a deal that solves the deficit, solves the debt limit, and make sure the full faith of the United States is protected.”