domingo, 10 de julio de 2011

Boehner abandons efforts to reach comprehensive debt-reduction deal

Boehner abandons efforts to reach comprehensive debt-reduction deal

House Speaker John A. Boehner abandoned efforts Saturday night to cut a far-reaching debt-reduction deal, telling President Obama that a more modest package offers the only politically realistic path to avoiding a default on the mounting national debt.

On the eve of a critical White House summit on the debt issue, Boehner (R-Ohio) told Obama that their plan to "go big," in the speaker's words, and forge a compromise that would save more than $4 trillion over the next decade, was crumbling under Obama's insistence on significant new tax revenue.


President Obama is expected to meet with congressional leaders Sunday to continue negotiations about hiking the nation's debt limit. (July 9)

President Obama is expected to meet with congressional leaders Sunday to continue negotiations about hiking the nation's debt limit. (July 9)

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"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Boehner said in a statement released less than 24 hours before the White House meeting was scheduled to begin. "I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."

Boehner's decision leaves negotiators reexamining a less-ambitious framework — aimed at saving roughly $2.4 trillion over the next decade — that had been under discussion between Vice President Biden and a bipartisan group of lawmakers. But that framework is hardly complete; the group broke up last month when Republicans walked out over the tax issue.

The sweeping deal Obama and Boehner had been discussing would have required both parties to take a bold leap into the political abyss. Democrats were demanding more than $800 billion in new tax revenue, causing heartburn among the hard-line fiscal conservatives who dominate the House Republican caucus. Republicans, meanwhile, were demanding sharp cuts to Medicare and Social Security, popular safety net programs that congressional Democrats have vowed to protect.

Obama, at least, was willing to make that leap and had put significant reductions to entitlement programs on the table. But on Saturday, Boehner blinked: Republican aides said he could not, in the end, reach agreement with the White House on a strategy to permit the Bush-era tax cuts for the nation's wealthiest households to expire next year, as lawmakers undertook a thorough rewrite of the tax code.

Democrats quickly accused Boehner of placing tax breaks for the rich above the nation's financial salvation.

"We cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree," White House communications director Dan Pfeiffer said in a statement.

"Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington."

The Sunday meeting at the White House will go on as scheduled, and Pfeiffer said Obama will continue to press for a broad deal aimed at stabilizing the soaring national debt. Without such a plan, lawmakers in both parties have said they will not vote to grant the U.S. Treasury additional borrowing authority.

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