–President Obama Meets With Congressional Leaders For 75 Minutes
–Obama Will Hold Press Conference 11 am Monday to Discuss Budget Talks
–White House: Obama to Meet Monday With Hill Leaders on Budget, Debt

By John Shaw

WASHINGTON (MNI) – President Barack Obama met with congressional
leaders Sunday for about 75 minutes to negotiate a deficit reduction and
debt ceiling package and at the end of the meeting the White House
announced that Obama will meet again Monday and hold morning press
conference to review the status of the talks.

Asked at the start of the Sunday meeting if a budget agreement is
possible within 10 days, Obama said “we need to.”

Neither Obama nor congressional leaders came to the microphones
Sunday night to discuss the status of the talks.

Obama and Vice President Biden met Sunday at the White House with
Senate Majority Leader Harry Reid, Senate Minority Leader Mitch
McConnell, House Speaker John Boehner, House Minority Leader Nancy
Pelosi, Senate Majority Whip Dick Durbin, Senate Minority Whip Jon Kyl,
House Majority Leader Eric Cantor and House Minority Whip Steny Hoyer.

When Obama first announced plans for the Sunday meeting Thursday
night he suggested it would be a lengthy session in which all of the
parties would clearly outline their fiscal priorities.

But the talks took a surprising turn when House Speaker John
Boehner said before they began that the focus of talks should be on a
narrower deficit reduction and debt limit accord than the $4 trillion
deal that all parties had supported in concept on Thursday.

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

“I believe the best approach may be to focus on producing a smaller
measure, based on the cuts identified in the Biden-led negotiations that
still meets our call for spending reforms and cuts greater than the
amount of any debt limit increase,” Boehner said.

The budget talks led by Biden this spring and summer worked to
assemble a draft deficit reduction package of about $2.4 trillion to
allow for an increase of the debt ceiling of about that size.

Participants in the Biden talks said those negotiations identified
between $1.5 trillion and $2 trillion in possible savings, but
deadlocked over the issue of whether additional revenues should be part
of the package.

Several weeks ago, Cantor pulled out of the Biden talks as did the
only other Republican in those negotiations, Senate Minority Whip Jon
Kyl. Both cited the GOP’s insistence that additional revenues not be
part of the discussions.

It was at that point that Obama and the top congressional
leadership began their direct talks, when commenced this past Thursday.

Late last week, Obama and Boehner raised the hope of reaching a $4
trillion deficit reduction deal over about a decade, but then rank-and-
file Democrats spoke out against securing savings from Medicare and
Social Security while rank-and-file Republicans insisted additional
revenues be taken off the table.

Administration officials struck a combative tone on several Sunday
morning TV shows about Boehner’s desire to narrow the scope of the talks
Sunday night.

Treasury Secretary Tim Geithner, appearing on NBC’s “Meet the
Press,” said the administration still wants the “biggest, most
substantial deal possible.”

“We are going to try to get the biggest deal possible,” Geithner
said, adding that a package that blends spending cuts and tax increases
is essential for political and economic reasons.

“You have to have balance in the package for it to work,” he said.

The Treasury secretary said smaller budget agreements, of the sort
that Boehner is now suggesting, are complicated to assemble and
difficult politically.

“Small deals are very tough too,” he said.

McConnell, the Senate minority leader, said on “Fox News Sunday”
that a disagreement over the tax issue made a $4 trillion package
unrealistic. He said Republicans continue to oppose tax increases.

The U.S. has already reached its $14.29 trillion debt ceiling.
Geithner has said for many weeks that Congress must pass legislation
increasing the debt ceiling by August 2.

** Market News International Washington Bureau: (202) 371-2121 **

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