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Last updated: July 12, 2011 12:29 am
President Barack Obama ratcheted up the pressure on Republicans in tense budget talks, saying that the time had come for them to match their rhetoric on America’s looming fiscal crisis with action on a politically difficult $4,000bn fiscal deal.
According to Democratic officials familiar with the talks, the US president stressed in a meeting with congressional leaders that Democrats in the House of Representatives would not support any deal to increase America’s borrowing authority unless Republicans were prepared to agree to new revenues and tax increases on the wealthy. Although Republicans control the lower chamber of Congress, dozens of Republicans are expected to vote against any increase in the debt limit, meaning that passage can only be guaranteed with the backing of some Democrats.
Asked whether there was time to reach a deal and pass it through Congress, a Democratic official familiar with the talks said: “Yes, but time is running out. It’s not too late, but the margin is getting smaller and smaller and the urgency is growing.”
Mr Obama said at a press conference earlier that he was prepared to take “significant heat” from his own party for making changes to entitlement programmes such as Medicare and Social Security, and expected Republicans – who oppose new revenue increases – to do the same.
“We keep on talking about this stuff, we have these high-minded pronouncements about how we’ve got to get control of the deficit and how we owe it to our children and our grandchildren. Well, let’s step up. Let’s do it,” Mr Obama said.
The president has been attempting to salvage efforts to strike an ambitious deal to slash $4,000bn from America’s debt over the next decade, after Republicans said they would only support a smaller package of fiscal reforms worth about $2,000bn. This more limited package would still pave the way for the debt ceiling to be raised, but defer a solution to the country’s biggest long-term debt burden until after the 2012 election. A Democratic official said even this scaled-back target would be hard to meet, since previous talks had failed to identify enough savings through spending cuts alone.
Mr Obama said he would host meetings with congressional leaders every day until an agreement was reached, but would not consider any short-term measures to temporarily increase the debt ceiling. Among proposals that were on the table as part of the $4,000bn deal was an increase in the age of eligibility for Medicare from 65 to 67 over the next three decades. The tone of the meeting on Monday was described as “constructive” by Democratic officials, though leaders continued to expressed “real disagreement”.
A final deal will have to be reached by August 2 in order to avoid a potentially devastating US default on its debt. “We might as well do it now: pull off the Band-Aid, eat our peas,’’ Mr Obama said.
John Boehner, the Republican speaker of the House of Representatives, on Monday explained why he had abandoned talks on a $4,000bn deal: “I made it clear to the president there are no votes in the Congress to raise taxes. Let’s just forget it.”
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