White House Hosts Bipartisan Debt Discussion Amid Possible GOP Compromises

Posted July 7th, 2011 at 12:55 am (UTC-5)
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U.S. President Barack Obama is set to host Democratic and Republican Congressional leaders at the White House on Thursday to continue negotiations on how to raise the nation's borrowing limit and avoid a possible debt default.

The meeting comes a day after top Republican lawmakers hinted at a possible compromise on revenue increases, a key sticking point in discussions. House Majority Leader Eric Cantor said on Wednesday that Republicans would be willing to discuss closing some loopholes that give tax breaks to some corporations and wealthy Americans. But he said this would have to be offset by tax cuts elsewhere.

Using the social media site Twitter, Wednesday, Mr. Obama took a jab at Republicans for earlier refusing to consider tax changes in the debt negotiations. He said Republicans cannot threaten to force the U.S. to default on its loans to protect tax loopholes for the “very richest Americans.”

Tuesday, top Republican House Speaker John Boehner, expressed his party's more hard-line stance, saying any deal that includes tax hikes “cannot pass the House.”

Washington has run up a total debt of $14.3 trillion, the current legal borrowing limit. If the limit is not increased before August 2, the U.S. could default on some of its loans, deeply damaging its credit rating and reputation.

Opposition Republicans say they want to see drastic cuts in spending before they will agree to an increase. Mr. Obama and his Democratic party allies in Congress support sharp spending cuts, but want to also raise some taxes on wealthy Americans, oil companies and some others to help close the deficit.

Talks chaired by Vice President Joseph Biden broke down late last month when some Republican lawmakers walked out to protest raising taxes.

U.S. Treasury officials have repeatedly warned of “catastrophic” economic consequences if Congress does not raise the so-called debt ceiling before August 2. After that date, the government will no longer be able to meet its financial obligations without borrowing additional money.