Obama, lawmakers try to reach deal on debt

July 11, 2011 3:41:05 AM PDT
A rare meeting at the White House on the debt and deficit wrapped up with little progress Sunday night.

President Barack Obama and congressional leaders from both parties plan to meet again Monday.

Obama said he and Congress "need to" agree on a budget deal in 10 days in order to meet an August 2 deadline to increase the nation's debt ceiling and avoid a potentially calamitous government default.

Obama was pushing for congressional leaders to accept a $4 trillion debt reduction package that included tax reform, entitlement reform and deficit reduction. However, feeling pressure from Tea Party members, House Speaker John Boehner and Republicans backed out of a deal in an about-face for Boehner, who indicated earlier he would support a big deal.

"I mean my goodness, I'm for the biggest deal possible, too, but we are not going to raise taxes," said Republican Minority Leader Sen. Mitch McConnell.

Some Democrats were against the big deal because it included cuts to entitlements.

"Some democrats do not want cuts to Social Security or Medicare," said Democratic Minority Leader Rep. Nancy Pelosi.

Despite the party differences, White House Chief of Staff Bill Daley said Sunday morning that Obama is committed to solving the deficit crisis but he says it's must be a shared sacrifice.

"He's been saying to the leaders it is time now to make the tough decisions. In this town, generally they kick the can. Nobody wants to do the tough things. He's committed to doing that," Daley said.

U.S. Treasury Secretary Tim Geithner warns leaders on both sides of the aisle something must be done soon.

"The credit rating agencies around the world said if Congress doesn't act by the 2nd, they will downgrade our credit the first time in history across the global economy," Geithner said.

Daley said Sunday he is confident both sides will reach a deal before the August 2 deadline. He would not say if the White House thinks the $4 trillion deal is dead. However, Republicans say a $2 trillion debt reduction package is more realistic.

The Associated Press contributed to this report.

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