Obama: Success on Budget Talks “Possible”

Posted July 6th, 2011 at 12:55 pm (UTC-5)
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A White House spokesman says success on an agreement to increase the U.S. borrowing limit is not guaranteed, but is possible, despite an impasse on how to proceed.

Spokesman Jay Carney told reporters Wednesday that U.S. President Barack Obama believes there are enough members of Congress in both parties who support his position that a budget deal must include tax increases for the wealthy.

On Tuesday Mr. Obama invited the leaders of both major political parties to the White House for a Thursday meeting to continue negotiations on the issue, as an August 2 deadline looms. After that date, the U.S. could default on some of its loans, deeply damaging its credit rating and reputation.

President 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.

However, Republican House Speaker John Boehner said Tuesday that any deal that includes tax hikes “cannot pass the House.”

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.

Washington has run up a total debt of $14.3 trillion, the current legal borrowing limit. But opposition Republicans say they want to see drastic cuts in spending before they will agree to increase that limit.

Talks broke down late last month after some Republican lawmakers walked out of negotiations chaired by Vice President Joseph Biden.