Summoning lawmakers, Obama seeks to break debt impasse

President Obama is calling congressional leaders to the White House for talks this week on raising the national debt limit, deepening his involvement in the political standoff to head off a potential crisis of federal government default.

Obama asked to meet with House and Senate leaders of both parties Thursday as the White House seeks a July 22 resolution to the impasse that, left unsolved, threatens upheaval in financial markets. The president brushed aside partisan invitations to Capitol Hill in favor of assembling all parties in one room.

The meeting comes at a crucial moment of stalemate in the deficit reduction discussions. Republicans insist on steep budget cuts in exchange for their votes to raise the current $14.3-trillion borrowing limit. The White House wants to address the deficit by cutting spending and cutting tax loopholes on corporations and wealthy families.

Without increased borrowing authority, the Treasury Department has said, the federal government will be unable to pay its bills by Aug. 2, risking an unprecedented default.

“I don’t think the American people sent us here to avoid tough problems,” Obama told reporters Tuesday in the White House briefing room.

The eight congressional leaders — the top two Republicans and Democrats in each chamber — agreed to meet with the president at the White House. However, Republicans dug in to fortify their no-taxes stance, insisting that not even measures to close loopholes would win support in Congress.

Republicans want at least $2.4 trillion in spending cuts in exchange for a comparable amount of new debt. Talks are underway behind closed doors among the White House and congressional staff.

“I’m happy to discuss these issues at the White House, but such discussions will be fruitless until the president recognizes economic and legislative reality,” said House Speaker John A. Boehner (R-Ohio).

Rep. Eric Cantor (R-Va.), the majority leader, who dropped out of earlier White House-led talks citing an impasse over taxes, plans to attend the meeting to “tell the president directly that a tax increase simply will not pass the House,” said his spokesman, Brad Dayspring.

Obama has said that it is up to GOP officials, as leaders, to persuade their rank and file. However, the GOP leaders also face “tea party”-backed lawmakers who consider any new source of federal revenue tantamount to a tax increase.

With deadlock beginning to set in, some Republican leaders in the Senate have suggested passing a short-term measure that allows bills to be paid but requires Congress to revisit the issue in a few months. Obama shot down that notion Tuesday, saying leaders must “leave their ultimatums at the door.”

The message represents a slight shift for the president and his aides, who until now have not directly dismissed the possibility of a short-term measure.

Obama called most of the congressional leaders in recent days to personally set the stage for this week’s talks. Senators were forced to scrap their weeklong recess this week to try to end the impasse.

But as they returned to Washington, Senate Republicans threatened to bring business to a standstill until the budget issues were resolved. Democratic leaders abandoned Tuesday’s planned vote on a resolution in support of the U.S. military mission in Libya. Instead, Sen. Harry Reid (D-Nev.), the majority leader, offered a budget-related measure asking Americans earning beyond $1 million a year to “make a more meaningful contribution to the deficit.”

Liberal lawmakers have grown increasingly impatient with Obama’s willingness to accept steep spending cuts in exchange for a vote on the debt ceiling. Sen. Bernie Sanders (I-Vt.) sent a letter to Obama signed by 100,000 Americans saying that new revenue from corporations and the wealthy should make up at least half the deal.

“Do I think the president has fought as hard as he should?” Sanders said Tuesday. “No, I do not.”

lisa.mascaro@latimes.com

cparsons@latimes.com