The Wall Street Journal
By: Carol E. Lee & Janet Hook
July 6, 2011
President Barack Obama called a budget-deficit summit Thursday at the White House, suggesting he and congressional leaders are moving closer to a deal that would clear the way for a vote to raise the government's borrowing limit and avoid default.
Mr. Obama, speaking at the White House on Tuesday, said he and congressional leaders in both parties made progress over the July 4th weekend. "But I don't want to fool anybody: We still have to work through some real differences," he said.
Mr. Obama renewed his demand that tax increases--targeted at corporate jet owners, oil and gas companies and Americans making more than $250,000 a year--be included in a deficit-reduction deal.
But House Speaker John Boehner (R., Ohio) rejected that idea. "The legislation the president has asked for--which would increase taxes on small businesses and destroy more American jobs--cannot pass the House, as I have stated repeatedly," Mr. Boehner said in a statement.
Mr. Obama set a deadline of reaching a deal within the next two weeks, leaving enough time to complete legislative action and pass a bill before Aug. 2, when the Treasury Department has said the government will begin defaulting on its obligations if Congress does not vote to increase the borrowing limit. Republicans have demanded trillions of dollars in spending cuts in exchange for their votes.
Mr. Obama rejected a possible temporary debt-limit increase, as some Republicans, including Senate Minority Leader Mitch McConnell (R., Ky.) have suggested. "This should not come down to the last second," Mr. Obama said.
The president's tone toward Republicans wasn't nearly as sharp on Tuesday as it was when he spoke last week at a news conference about the deficit negotiations last week.
On Capitol Hill, partisan jockeying continued as Republicans derailed debate on a resolution authorizing the U.S. to participate in military activities in Libya. That led Majority Leader Harry Reid (D., Nev.) to open debate on a symbolic measure reinforcing Democrats' core demand that any deficit-reduction deal include tax increases on the wealthy. The non-binding resolution calls for people earning more than $1 million a year to "make a meaningful contribution" to any deficit deal.
Mr. McConnell said he hoped Mr. Obama "would listen to Republicans and hear firsthand why we think raising taxes in a weak economy is a bad idea and what the realities are over here."
"He needs to understand the principle at stake here from our point of view," Mr. McConnell said in a speech Tuesday. "It's not about rich and poor. It's not about an election. It's about making Washington take the hit for a change. It's about having Washington make some tough choices for a change."
The two sides had agreed to about $1 trillion in cuts in talks led by Vice President Joe Biden, people familiar with the negotiations said. But those talks broke down when Democrats proposed roughly $400 billion in tax increases, prompting Republicans to walk out.
Those invited to the summit include Messrs. Reid, Boehner and McConnell, House Minority Leader Nancy Pelosi (D., Calif.), Reps. Eric Cantor (R., Va.) and Steny Hoyer (D., Md.), and Sens. Jon Kyl (R., Ariz.) and Dick Durbin (D., Ill.). Ms. Pelosi was among those who spoke with the president over the weekend, a member of her staff said.
"This will require both parties to get out of our comfort zones, and both parties to agree on real compromise. I'm ready to do that. I believe there are enough people in each party that are willing to do that," Mr. Obama said. "It's my hope that everybody's going to leave their ultimatums at the door."
--Jared Favole and Damian Paletta contributed to this article.