Boehner will seek smaller debt deal

Associated Press

WASHINGTON

House Republican budget negotiators have abandoned plans to pursue a massive $4 trillion, 10-year deficit reduction package in the face of stiff GOP opposition to any plan that would increase taxes as part of the deal.

House Speaker John Boehner told President Barack Obama on Saturday that a smaller agreement of about $2 trillion was more realistic.

In a statement issued Saturday evening, Boehner said: “Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes.”

The White House responded that Obama will continue to push to make as much progress on deficit reduction as possible.

Boehner’s statement came a day before he and seven of the top House and Senate leaders were scheduled to meet at the White House in a negotiating session and lay out their remaining differences.

A deficit reduction deal is crucial to win Republican support for an increase in the nation’s debt ceiling. The government’s borrowing capacity is currently capped at $14.3 trillion and administration officials say it will go into default without action by Aug. 2.

Obama tried to build political support for an ambitious package of spending cuts and new tax revenue that would reduce the debt by $4 trillion over 10 years. But from the moment he proposed it, Republicans said they would reject any tax increases and Democrats objected to spending cuts in some of their most prized benefit programs, including Medicare, Medicaid and Social Security.

A bipartisan group of lawmakers led by Vice President Joe Biden had already identified, but not signed off on, about $2 trillion in deficit reductions.