WASHINGTON — Negotiations over how to cut government spending and raise the nation's debt limit headed to the White House on Monday, with President Barack Obama meeting with Senate leaders from both parties.
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FILE - In this June 23, 2011 file photo, President Barack Obama speaks in New York. It might be time for another midnight ride by Paul Revere, this time warning "the creditors are coming." Americans seem not to have awakened to the fast-looming debt crisis that could summon a new recession, imperil their stock market investments and shatter faith in the world's most powerful economy. Those are among the implications, both sudden and long-lasting, expected to unfold if the U.S. defaults on debt payments for the first time in history.
Obama will meet with the leaders separately, with Democratic Sen. Harry Reid coming to the White House Monday morning and Republican Sen. Mitch McConnell arriving late afternoon. Vice President Joe Biden will also join the Oval Office meetings.
The key disagreement between the parties is over taxes. Democrats, including Obama, say a major deficit-reduction agreement must include tax increases or the elimination of tax breaks for big companies and wealthy individuals. Republicans are demanding huge cuts in government spending and insisting there be no tax increases.
Ahead of his meeting with Obama, McConnell said Democrats' calls for tax increases do not amount to a "serious" position.
"It is my hope that the president will take those off the table today so that we can have a serious discussion about our country's economic future," McConnell wrote in an editorial that appeared Monday on CNN.com.
Absent an agreement that cuts long-term deficits, Republicans say they will not vote to increase the nation's borrowing, which will exceed its $14.3 trillion limit on Aug. 2. The administration has warned that if Congress does not raise the debt ceiling, it could mean the first U.S. financial default in history and send economic shockwaves around the world.
The president made his move to get personally involved in the negotiations on Friday, after bipartisan talks led by Biden stalled when Republican lawmakers abandoned the negotiations, saying the issues still on the table must now be addressed by the president.
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