Obama, House Republicans Have ‘Productive’ Meeting on Debt

Posted June 1st, 2011 at 3:25 pm (UTC-5)
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The White House says President Barack Obama has had a “productive” meeting with Republicans on reducing the country's debt.

Spokesman Jay Carney said the talks Wednesday with members of the House Republican Conference were an opportunity for Mr. Obama to hear their side and for them to hear from him.

Carney said the large meeting was not the forum to negotiate details, but rather was part of a process and a chance to meet in a non-confrontational way.

But Carney said the president made it clear he believes there is no margin for casting doubt that the debt ceiling would be raised, and that even the suggestion that it would not be increased could have dire consequences for the U.S. and global economy.

The Republican-controlled House of Representatives on Tuesday defeated a bill to raise the country's $14 trillion debt limit by about $2 trillion without any spending cuts.

House Speaker John Boehner, a Republican from Ohio, told reporters after the White House meeting that if the debt limit is raised, the spending cuts should exceed the increase. Otherwise, he said, it would cost jobs.

U.S. Treasury Secretary Timothy Geithner attended the talks Wednesday, and will be on Capitol Hill Thursday to meet with lawmakers.

Republicans introduced Tuesday's legislation, but also wanted the bill to be defeated. The chairman of the House Ways and Means Committee, Republican Dave Camp, said Republicans are making clear they will not accept an increase in the debt limit without major spending cuts and “real budgetary reforms.”

Democrats called the vote “political theater” by attempting to get Democrats on the record for voting to raise the debt ceiling without cuts in government.

Republicans are calling for deep and immediate spending cuts, while Democrats favor spending cuts or tax increases over several years.

Secretary Geithner has warned the United States could face “catastrophic consequences” if lawmakers fail to raise the debt limit.

Geithner has said he will use emergency measures to re-allocate funds to continue making payments on the U.S. government debt. Those measures will give him until about August 2 before the nation will have to stop making some payments altogether.

Geithner said defaulting on debt payments would raise the cost of borrowing money, and that higher interest rates will be passed on to people, businesses and investors.