By Sam Youngman, Erik Wasson and Russell Berman - 07/11/11 10:23 PM EDT
President Obama and congressional leaders will meet for a third straight day of debt talks Tuesday after failing to make progress at a Monday meeting.
The two sides bickered Monday in public and through their aides, putting different spins on a meeting that plainly failed to move things forward.
“No revenue's not a serious position,” one Democrat familiar with the negotiations said of the GOP position.
Republicans cast Monday’s talks as focused on an medium-sized deal based on progress made in talks led by Vice President Biden, despite Obama's public push for a larger deficit-reduction package.
The mid-sized deal would reduce the deficit by $2.4 trillion in exchange for raising the debt ceiling beyond next year's elections.
Democratic officials, for their part, said Obama echoed the call he made during a morning press conference, telling Republicans they should shoot for the biggest deal possible and laying out why a “cut-only” plan would not add up to the savings sought by Speaker John Boehner (R-Ohio).
Obama said the savings identified by the Biden group would yield about $1.5 trillion, not enough to raise the debt ceiling beyond the 2012 elections and meet Boehner’s requirement that deficits be cut by more than the borrowing limit is raised.
What's more, Obama said no Democrats would be willing to sign onto a plan that cuts $1.5 trillion but doesn't require any concessions from Republicans.
House Minority Whip Steny Hoyer, one of the meeting's participants, told the group that he was “not sure even a single Democrat would be able to support” a cut-only plan.
Republicans likely need some Democratic support to move a package through the House, since some Republicans oppose any increase to the debt ceiling.
House Majority Leader Eric Cantor (R-Va.) said Monday he sees more than $2 trillion in savings from the Biden talks, including $1.1 trillion in discretionary cuts. Up to $350 billion of this savings come from interest savings accrued from making the other cuts.
Cantor sees another $300 billion in non-healthcare mandatory cuts.
According to a Democratic aide, Cantor unveiled a new proposal at the meeting to cut Medicare. Obama balked at it because the proposal was not accompanied by any revenue proposals and did not meet his definition of “shared sacrifice,” the source said.
Cantor spokesperson Laena Fallon, however, said that there was no "new" Medicare proposal and what Cantor outlined had already been discussed in the Biden talks.
A GOP aide said Cantor presented his understanding of the Biden talks to the meeting at the request of President Obama. He outlined ranges of savings in the three categories of discretionary spending, mandatory non-healthcare and healthcare spending.
Including all the cuts discussed in the Biden talks gets up to $2.3 trillion in savings including lowered interest.
Obama took the lower end of the range in each category and said that it would total $1.8 trillion in savings, the aide said.
A Democratic aide said Boehner hardly spoke at the meeting which was “dominated” by Cantor and the group will meet again Tuesday at 3:45 pm.
But a Republican aide familiar with the meeting described a testy exchange in which Boehner got the better of Obama.
Boehner told Obama that it was wrong to say cutting entitlements is easy for Republicans.
“It’s clear to all of us how big this spending problem is. Congress keeps voting for programs we can’t pay for. But look, entitlement cuts aren’t easy for us to vote for either. Our guys aren’t cheerleading about cutting entitlements,” Boehner said according to an aide.
Obama said “your guys already voted for them,” referring to the House-passed budget which turns Medicare into a premium support system.
“Excuse us for trying to lead,” Boehner shot back.
Obama stressed that he would not support a plan based only on spending cuts.
“His challenge to everyone was to go back and think a little harder,” one source said.
If Republicans are going to take it on the chin over a medium-sized deal, Obama argued, then they should seize the moment and go for the bigger, more meaningful package.
Democratic officials were emphatic that at no point has Obama ever discussed a tax increase that would affect small businesses or middle class families, and the revenue increases Obama does support would not take effect until 2013.
“We are talking about asking the wealthiest 2 percent of Americans to pay more,” said one source. “They want every American to believe President Obama wants to raise their taxes. That's not true.”
Democrats said the clock is ticking, and Obama will stay true to his word of calling the leaders back to the White House daily until there is a deal. Those same sources insist that a big deal is not out of reach.
“It's not too late, but the margin of error is getting smaller and smaller,” one source said.
House Minority Leader Nancy Pelosi (D-Calif.) in a statement said “we continue to oppose benefit cuts in Social Security and Medicare. These pillars of economic and health security should not be used as a piggybank to subsidize tax cuts for the wealthy.”