With timing clearly designed to avert a hemorrhaging sell-off on Wall Street, House Speaker John Boehner late Friday declared dead negotiations with the White House on a large-scale deficit reduction package. An angry and frustrated President Obama said he’d been “left at the altar now a couple of times” by Boehner as deficit talks foundered and summoned Hill leaders to the White House Saturday morning to begin work on a debt-ceiling bill to avoid the nation’s first-ever default. Boehner said he would attend.
In dueling press conferences, Obama and Boehner argued passionately over who was to blame and why.
“This was an extraordinarily fair deal,” Obama said. “If it was unbalanced, it was unbalanced in the direction of not enough revenue. It is hard to understand why Speaker Boehner would walk away from this kind of deal.”
Obama then declared “we have run out of time” and characterized the Saturday morning White House session with the bipartisan and bicameral congressional leaders as deadly serious.
“They are going to have to explain to me how it is that we are going to avoid default,” Obama said. “And they can come up with any plans that they want and bring them up here and we will work on them. The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013.”
Later, Boehner appeared in the Capitol and accused Obama of “moving the goal posts” and undermining a tax deal that would have included $700 billion in new revenue (derived from lower and flatter rates, not tax increases) over 10 years.
"Dealing with the White House is like dealing with a bowl of Jell-o,” Boehner said.
Obama complained about not being able to get his phone calls to Boehner returned. The speaker did not deal directly with that snafu but said he did not believe his relationship with Obama —generally cordial to date—had been “permanently damaged.”
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He said Congress “can act next week and not jeopardize the full faith and credit of the United States government.”
Surprisingly, House Republicans blamed Obama for seeking an additional $400 billion in taxes, a maneuver they said was set in motion by the bi-partisan Gang of Six. Earlier in the week, the group of 6 senators—three from each party—who earlier in the week floated a proposal that raised far more tax revenue, Republicans said, than the tentative accord they had ironed out with White House Chief of Staff Bill Daley and Treasury Secretary Tim Geithner. Boehner said those tax increases would have hit “people who create jobs” and constituted a deal-breaker.
“What is absolutely true is we wanted more revenue than they had initially offered,” Obama said. "But as you’ll see, the spending cuts that we were prepared to engage in were at least as significant as the spending cuts that you’ve seen in a whole range of bipartisan proposals, and we had basically agreed within $10 billion, $20 billion -- we were within that range. So that wasn’t the reason this thing broke down. When you look at the overall package, there’s no changing of the goalposts here."
Obama’s sense of urgency and passion appeared to carry the moment as he again positioned himself as the top risk-taker in high-wire talks that once aimed at achieving $4 trillion in deficit reduction over 10 years. When Boehner scotched those talks two weeks ago, Obama and the speaker revived them and appeared on course for a slightly less ambitious package of $3 trillion to $3.5 trillion in savings—built heavily around spending cuts with
Time is no one’s friend, least of all Americans with 401K accounts or tax-deferred college savings accounts as well as companies and institutional investors fearful of Wall Street volatility if, by the time trading starts Monday, no deal to avert a default by Aug. 2 emerges.