Obama: 'It's decision time'

Declaring it “decision time,” President Obama is giving congressional leaders until the weekend to determine the size and scope of a package to reduce the deficit and increase the nation’s $14.3 trillion debt limit.

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At a meeting described by multiple officials as “polite” and “cordial,” negotiators finished scouring the potential elements of a deficit-reduction deal, and Obama instructed Republican and Democratic leaders to discuss with their caucuses what kind of measure could pass Congress by the Aug. 2 deadline set by the Treasury Department for raising the debt ceiling.

“It’s decision time. We need concrete plans to move this forward,” Obama told the leaders, according to a Democratic official familiar with the meeting. He gave them 24 to 36 hours to consult with each party’s rank-and-file.

The House Republican conference will meet Friday at 8 a.m., House Democrats will meet at 9 a.m., and the president has scheduled a press conference for 11 a.m.

The president and congressional leaders will not meet on Friday, but will probably reconvene over the weekend, an official said.

Obama reiterated at the meeting that he still wants “the biggest deal possible.”

“A short-term solution is not something I will sign,” the Democratic official quoted Obama as saying.

Now that Obama and the lawmakers have gone over everything that would be included in a big deal “in detailed fashion,” Obama told the lawmakers they should return to Capitol Hill and “spend some time talking to [their members] about what’s possible,” an official said.

Yet while the president pushed for a big deal, there were signs Thursday that the White House was hedging its bets by jumping into negotiations between Senate GOP leader Mitch McConnell (Ky.) and Majority Leader Harry Reid (D-Nev.) over a potential fall-back plan if the leaders do not reach an agreement in time. A Democratic official said there was little discussion of the idea at the White House meeting, however.

By all accounts, Thursday’s meeting — the fifth White House summit in as many days — lacked the fireworks of the meeting on Wednesday, when Republicans said an “agitated” Obama stormed out in frustration after comments by House Majority Leader Eric Cantor (R-Va.).

“Cantor did not say one word” at Thursday’s meeting, two Democratic officials said. It is unclear why Cantor did not speak. 

Aides described the meeting, which lasted about 80 minutes, as “composed and polite.”

A Democratic aide said Thursday's meeting was about revenue and that Obama offered "a wide array of special interest tax loopholes that could be closed to offset the payroll tax credit."

Those included oil and gas loopholes, closing loopholes for corporate jet owners, and ending subsidies for ethanol producers.

The GOP leaders rejected them all, the aide said.

House Minority Whip Steny Hoyer (D-Md.) told reporters at the Capitol that leaders will spend Friday looking at “alternatives,” although he did not elaborate on what those might be.

“I personally continue to be a strong supporter of reaching a $4 trillion resolution,” Hoyer said, “which will I think (A) get a handle on our deficit and debt, (B) send a very strong signal to the markets, (C) be a job-producer because of the confidence it will give to the market and (D) give confidence to the international markets as well.”

Minority Leader Nancy Pelosi (D-Calif.) told Obama at the meeting that the House Democratic Caucus remained supportive of a “grand bargain,” a Democratic aide said.

Administration officials walked through possibilities for achieving budget savings through entitlement reforms, tax code changes and budget process reforms.

A GOP aide said much of the time was spent outlining a subset of the healthcare savings that had been discussed by members of the Biden group. The administration also presented several of their tax recommendations and proposed deficit reduction enforcement mechanisms, which the aide said would include automatic tax increases. Similar proposals were tackled by the Biden group over the last two months, the source said.

Another Republican staffer said Treasury Secretary Timothy Geithner told the group that global financial markets were concerned both with the need to raise the debt ceiling and seeing a plan to reduce the nation’s deficit and debt. 

“The Speaker used that warning to reiterate his concern that nothing the administration is offering to this point will resolve our debt problem,” the GOP aide said. “He continued to press the White House to get serious about reducing spending in a meaningful way.”

Earlier in the day, Reid said the White House has joined secretive talks between himself and McConnell to craft an escape plan, should lawmakers fail to reach a deal for raising the debt ceiling.

Reid said he is negotiating a solution partly based on McConnell’s proposal to give Obama the power to raise the debt ceiling unless Congress disapproves. He said the talks are ongoing with McConnell and “a number of different people from the White House.”

The involvement of the White House signals that the fall-back plan might be gaining new steam as the talks on a bigger deficit bargain turn into a partisan blame game. House conservatives have said they do not support the McConnell plan.

Reid said his work with McConnell “is not the only plan” available, but Senate Majority Whip Dick Durbin (D-Ill.) said, given the legislative calendar, an alternative such as the McConnell-Reid proposal will be necessary if another deal cannot be struck this week. 

Durbin said Obama “has expressed to the [debt-ceiling] group that by Friday, we have to have to have something done, and that’s realistic.”

White House spokesman Jay Carney said the president is looking for progress in the debt talks.

“The president views Friday as an important moment where we can make an assessment about whether we are moving toward a significant bipartisan agreement on deficit reduction or not,” Carney said.

House Speaker John Boehner (R-Ohio) on Thursday said the fall-back plan should be on the table, even as he said that he does not know if it could pass the House. 

The McConnell-Reid plan could be tied to spending cuts to sweeten it for House Republicans, and might involve the appointment of a commission of lawmakers to propose additional deficit cuts that would receive expedited consideration in the Congress. 


—Russell Berman and Bob Cusack contributed to this article, which was updated at 10:20 p.m.