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Debt Deal Remains Elusive

Updated: 10:48 p.m.

After a weekend during which Republicans made it clear they would reject any debt limit deal that included tax increases, it was the Democrats’ turn Monday to push back and say they will turn down any deal that lacks it.

In the second closed-door meeting at the White House in less than 24 hours, House Minority Whip Steny Hoyer (D-Md.) flatly warned that Democrats would not provide votes for any deficit reduction package that didn’t include revenue raisers —  whether that deal is a large $4 trillion package or a smaller $2.5 trillion proposal, aides said.

The at-times uncomfortable session was also marked by a sharp exchange between Obama and Speaker John Boehner (R-Ohio).

Indeed, it appeared that Obama, Vice President Joseph Biden and the top eight Congressional leaders had ended the day in another stalemate, after spending nearly two hours reviewing the details of a preliminary $1.7 trillion package produced by Biden’s group of negotiators before Republicans walked away from those talks last month over the prospect of tax increases.

Of course, Democrats have also not budged from their position of protecting entitlements. They balked at a proposal presented by House Majority Leader Eric Cantor (R-Va.) that would cut $250 billion in Medicare, much of which would result in charging seniors higher copays, according to Democratic officials familiar with the talks.

Cantor tried to sell the Medicare proposal as a part of a previous agreement among Biden group participants, but when confronted by the vice president, Cantor was forced to admit that they had not, in fact, agreed to such a deal, the officials said.

Cantor spokeswoman Laena Fallon disputed the account late Monday. “The Medicare proposals that Eric discussed today at the White House were identified in the Biden talks and discussed by the Vice President and the bipartisan participants in the talks as an area of potential savings … which had been under discussion for weeks,” she said in a statement.

Tensions came to a head in a particularly heated exchange between Obama and Boehner — who held dueling press availabilities within two hours of each other Monday. The Speaker attacked Democrats for being reckless spenders and said that entitlement cuts “aren’t easy for us to vote for, either. Our guys aren’t cheerleading about cutting entitlements,” according to a GOP aide.

Obama then referred to the House-approved budget authored by Rep. Paul Ryan (R-Wis.) and said, “Your guys already voted for them,” prompting Boehner to shoot back: “Excuse us for trying to lead.”

Democrats such as Hoyer, who peeled away moderate Democrats to clear a bill to avert a government shutdown in April, urged Republicans at the table to consider revenues, and Obama made his case to the American people in his third press conference since Thursday.

“What we have said is, as part of a broader package, we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate and that millionaires and billionaires can afford to pay a little bit more,” Obama said. “… I want to be crystal clear — nobody has talked about increasing taxes now.”

Despite the continued impasse, Obama and the top eight leaders in Congress have pledged to meet every day until they reach an agreement on a package to cut trillions of dollars from the federal debt in advance of an Aug. 2 deadline to raise the government’s borrowing capacity. The group will meet at 3:45 p.m. Tuesday, according to Reid.

Perhaps in a sign that leaders are less than optimistic about finding a deal by the end of next week — which Treasury Secretary Timothy Geithner on Sunday suggested was necessary — Senate Republicans will convene earlier than usual for their weekly policy lunch Tuesday so that Minority Leader Mitch McConnell (R-Ky.) can update his Conference on the ongoing talks. It’s possible McConnell will use the session to brief his Members on a potential “contingency” plan he mentioned on “Fox News Sunday” that would be employed if leaders cannot come to an agreement before their deadline.

The discourse Monday, with Obama offering a pointed attack on both Congressional Democrats and rank-and-file Republicans for their intransigence, was a far cry from the status of talks less than a week ago. Obama said he’s still reaching for a larger $4 trillion deal, even though Boehner on Saturday evening suddenly backed away from a sweeping $4 trillion plan that the president said he still wants.

Obama and Boehner hit the golf course last month, met privately at the White House two Sundays ago and were engaging in productive dialogue that many Hill sources indicated had given leaders a “framework” for a deal heading into the first “big eight” meeting Thursday. Since then, however, talks appear to have unraveled. Boehner barely spoke at Sunday’s session, leaving much of the talking to Cantor, according to Sen. Dick Durbin who was in the Cabinet room with leaders that day.

Heading into Monday’s meeting, Obama tried yet again to elevate himself above the Congressional fray, projecting an image of the “adult in the room” and saying it’s time to “eat our peas” and come to a compromise to avoid a default. He stood firm on his commitment to not sign any debt and deficit deal unless it extended past the 2012 elections.

“If we think it’s hard now, imagine how these guys are going to be thinking six months from now in the middle of election season where they’re all up. It’s not going to get easier,” Obama said in his third public statement since Thursday.

If Obama was trying to say that both sides were firm in their positions, then Boehner gave him the proof he needed Monday.

“Our disagreements are not personal, they never have been. The gulf between the two parties now is about policy. It’s not about process. It’s not about personalities,” Boehner said. “The president and I do not agree on his view that the government needs more revenues through taxes on job creators. The president and I also disagree on the extent of the entitlement problem and what is necessary in order to solve it.”

Democrats on the Hill seemed to believe they had received the short end of the stick when it came to the presidential treatment Monday. Obama told reporters, “There is, frankly, resistance on my side to do anything on entitlements.”

House Minority Leader Nancy Pelosi (D-Calif.) had said as early as May — when the bicameral, Biden talks began — that Democrats are open to reform to Medicare and Medicaid but still believed her Caucus could fight to protect the programs from substantive changes.

“When we’re talking about Medicare, we are open to many [changes],” Pelosi told Bloomberg News then. “We are listening to every suggestion. But one suggestion we are not open to is the abolishment of Medicare. That is what the Republicans have put forth in their budget.”

Steven T. Dennis and John Stanton contributed to this report.

Editor’s Note:

This article updates the print version to include a reaction from House Majority Leader Eric Cantor’s spokeswoman.

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