–House Speaker Says Tax Dispute Ends Hope For Grand Fiscal Deal
–Rep. Boehner: Should Work For Debt Hike Deal Based On Biden Framework
–Tsy’s Geithner, Chief of Staff Daley Slam GOP For Scaled-Back Goal
–Geithner: Admin Still Pushing For ‘Biggest Deal Possible’
–Daley: Need ‘Big Deal’ To Make A ‘Serious Dent On Our Deficit’

By John Shaw

WASHINGTON (MNI) – Facing clear and growing resistance from rank
and file Republicans about trying to craft a sweeping $4 trillion budget
agreement with President Obama, House Speaker John Boehner said this
weekend that the focus of Sunday night’s budget talks should be on a
narrower deficit reduction and debt limit accord.

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

“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 Vice President Joe Biden this spring and
summer worked to assemble a 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.

President Obama and Vice President Biden are meeting with Boehner
and other congressional leaders Sunday at 6 p.m. EDT.

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

Administration officials struck a combative and defiant 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.

Geithner once again said the August 2 deadline for increasing the
debt ceiling is real and added he’s “confident” that Congress will meet
this deadline. He said failure to increase the debt ceiling by this
date would cause broad and deep economic damage to the U.S. and global
economies.

White House chief of staff William Daley, appearing on ABC’s “This
Week,” said Boehner’s call for a smaller budget agreement is “rather
unfortunate.”

“It is time now to make the tough decisions,” he said.

Daley said a deficit reduction agreement of about $4 trillion is
needed to make a “serious dent on our deficit.”

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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