Obama ends tense debt talks with a warning
President Obama abruptly left debt negotiations with congressional leaders Wednesday at the White House when a top Republican said there was no longer time to engage in the large-scale deficit reduction discussions the White House is now seeking as part of a vote to raise the nation’s debt ceiling.
The flare-up came at the end of the nearly two-hour session during which House Majority Leader Eric Cantor (R-Va.) told the president that Congress should instead consider a series of debt ceiling votes based on spending cuts that already have been identified. Talks could then continue to identify additional cuts for subsequent votes, he said.
Republicans have refused Democrats’ call for taxes on the wealthy. The president responded by ending the meeting, sources said.
“I suggested we were so far apart I didn’t see in the time before us how we get to where he wants us to be,” Cantor told reporters after the meeting.
Obama warned Cantor not to set such an ultimatum, and according to congressional and administration aides repeated his vow to veto legislation that would extend the debt ceiling only for a short period.
“The president told me, ‘Eric, don’t call my bluff. I’m going to take this to the American people,’ ” Cantor said.
Aides described it as the tensest meeting yet in the months of discussions, with the president at one point accusing both sides of posturing.
Democratic officials, however, denied reports that Obama had “walked out” of the meeting. “Left abruptly is perfectly fair,” one official said. “But the meeting was over — in no sense did he walk out on it.”
Toward the end of the meeting, before he left, Obama said: “This process is confirming what the American people think is the worst about Washington: that everyone is more interested in posturing, political position and protecting their base than solving real problems,” according to a second Democratic official familiar with the talks. Both officials spoke on condition of anonymity because of the nature of the discussions.
The president “was most insistent that he wanted the debt limit extended into 2013, because he believes a repeat of what we’re going through now, when things will be politically more tense, would be very destabilizing,” the second official said.
During the White House meeting, Moody’s Investors Services issued a warning that it was putting the U.S. credit rating on watch for possible downgrade — which could set off a firestorm in the financial markets if Congress does not act soon to raise the federal debt ceiling.
The White House and congressional Republicans have been locked for more than a month in a stalemate over raising the federal government’s $14.3-trillion debt ceiling. Administration officials say the government will be unable to pay all of its bills if the limit is not raised by Aug. 2.
Obama warned Tuesday that failure to raise the debt ceiling could mean that Social Security checks, veterans benefits and other government obligations would not be paid as scheduled in August.
Republicans have refused to vote for the debt ceiling increase unless it is accompanied by steep spending cuts equaling about $2.4 trillion over the next decade, though their own spending plan requires that the limit be raised. Obama is seeking a larger deficit reduction plan, totaling about $4 trillion over the decade, but would include both spending cuts and tax revenue. The GOP has rejected that idea.
In addition to the divisions between the Republicans and the White House, the GOP remains internally divided over how to proceed, with some Republican leaders pushing for a compromise while other press toward a greater confrontation with Obama.