Washington Running out of time, President Barack Obama softened his stand and signaled Wednesday he would back a short-term deal to prevent a disastrous financial default on Aug. 2, but only if a larger and still elusive deficit-cutting agreement was essentially in place. He called lawmakers to the White House in a scramble to find enough votes from both Republicans and his own party.
Obama met with the Democratic leaders of the House and Senate, and then separately with House Speaker John Boehner and his deputy, Majority Leader Eric Cantor, in hopes of cobbling together a big compromise. All signs pointed to a legislative fight that would play out to the end.
The president, pushing for a deal that would cut the nation’s budget deficit across the next decade and extend the government’s tapped-out borrowing power through the approaching election year, had threatened to veto any stopgap expansion of the nation’s debt limit. He even challenged Cantor, R-Va., not to call his bluff about it in one confrontational moment last week.
Obama’s now-calibrated position, offered by spokesman Jay Carney, reflected the reality: leaders are nearly out of time to head off unprecedented trouble. Carney said if a divided Congress and the White House can agree on a significant deal, Obama would accept a “very short-term extension” of the debt limit to let bigger legislation work its way through Congress.
Even a few days matters, given the stakes.
The government will exhaust its ability to borrow money and pay its bills come Aug. 2, an outcome that could sink the country back into recession, halt Social Security checks, send interest rates higher and erode the creditworthiness of the richest nation on earth.
The White House made clear Obama still opposes a short-term extension of the debt limit on the order of 30 days or more on the grounds that would just punt the problem. He reiterated that views in his meetings with lawmakers, a Democrat familiar with the talks said.
An aide to Boehner, R-Ohio, said the Republican leaders and the president will continue to talk, but no meeting had been scheduled.
Those familiar with the talks spoke on condition of anonymity to disclose details of the private discussions at the White House. All sides were keeping information tight as time slips by and negotiations grow sensitive.
The latest talks centered on what it will take to muster enough votes from both parties to muscle legislation through the House and Senate and raise the national debt limit. Congressional leaders say they want to prevent default, but they are far from agreed on how.
The divided-by-party nature of Obama’s negotiations underscored his need to get a bottom line from Democrats in both chambers and the leaders of the Republican-run House.
His challenge with fellow Democrats is to persuade them to accept changes to the popular entitlement programs of Medicare and Social Security. With Republicans, Obama is slamming into opposition from conservatives who refuse to consider tax increases. Obama wants a mixed approach of higher taxes on the wealthy and spending cuts that share the pain.