Obama, Lawmakers Start High Stakes Debt Talks

Posted July 7th, 2011 at 11:45 am (UTC-5)
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U.S. President Barack Obama is sitting down with top lawmakers, hoping to win support for a bolder package of spending cuts and tax increases aimed at slashing the nation’s debt.

White House and congressional aides say Mr. Obama will propose doubling the amount of money trimmed from the country’s budget deficit to $4 trillion during Thursday’s meeting.

They say the new package will include significant cuts to Social Security and Medicare – two of the country’s biggest social safety nets. It would also call for increasing tax collections from large corporations and letting tax cuts expire for the wealthiest households.

Before the meeting, the top Republican in the House of Representatives, Speaker John Boehner, reiterated his party’s opposition to any proposal that raises taxes. But he also told reporters he would be willing to discuss a comprehensive reform of the U.S. tax system.

Talks between the White House and Republican leaders in Congress fell apart two weeks ago, when they failed to agree over a package that would have reduced the country’s budget deficit by about $2 trillion over the next ten years.

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.

U.S. Treasury officials have repeatedly warned of “catastrophic” economic consequences if Congress does not raise the so-called debt ceiling before August 2.

Meanwhile, one of America’s richest men criticized Congress for playing “Russian roulette” by bickering over whether to raise the debt limit.

Billionaire investor Warren Buffet told cable television network CNBC that lawmakers were being counterproductive by using the issue for political purposes.

On Wednesday, House Majority Leader Eric Cantor said Wednesday Republicans would be willing to discuss closing some loopholes that give tax breaks to some corporations and wealthy Americans. And some members of Mr. Obama’s Democratic Party have already expressed concerns about any cuts to the nation’s social safety nets.

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.”

Opposition Republicans say they want to see drastic cuts in spending before they will agree to an increase.