In meeting with Senate GOP, president says he's not setting a trap on deficit

President Obama pledged in a private meeting with Senate Republicans on Thursday to challenge his own party on entitlement reform.

He also asked Republicans not to believe conspiracy theories that he is pushing a deficit deal as part of a strategy to help Democrats capture the House.

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Obama talked about areas of possible common ground, including revenue-neutral corporate tax reform and a special task force to study regulatory reform, said GOP senators who attended.

He received applause from Republican senators when he entered the room, when he was introduced and when he concluded his remarks.

The president said he was encouraged by progress in Congress on immigration reform.

Gun control, one of the president’s top priorities, did not get mentioned, according to one GOP senator.

Obama told the Senate Republican conference that he is willing to take on Democrats in Congress over reforms to Social Security and Medicare and asked GOP lawmakers to challenge their own party’s base over the need to raise more tax revenue.

After the lunch concluded, one senior administration official said Obama's purpose in attending the lunch was "because he wants to work with people who want to come together and work with him."

While the official said it was unlikely the meetings would change the tenor in Washington altogether, Obama is interested in seeing where the possibilities of bipartisanship lie and will continue to the conversation "through various types of outreach."

Obama met with House Democrats after his session with Senate Republicans. He has met with all four caucuses on Capitol Hill over the past three days. 

The president has been under pressure from Democrats to not move too far on entitlement reforms in his talks with Republicans, who for their part have pressured the president to go further. 

Besides the caucus meetings, Obama has also held a series of discussions with individual Republican senators, and he met with a dozen members of the Senate GOP caucus last week. 

White House aides have said Obama is interested in working with rank-and-file House and Senate Republicans to win progress not only on a deficit-reduction package but also on other legislative issues. The latest Obama strategy involves working around GOP leaders in the House and Senate. Speaker John Boehner (R-Ohio) has said he is done negotiating with Obama, while Senate GOP Leader Mitch McConnell (Ky.), who has helped broker deals in the past, has a reelection race in 2014.

McConnell described Thursday's meeting as a “candid exchange.” He said a “considerable portion of the time” was devoted to discussing the need for deficit reduction.

“With regard to the important but unsustainable entitlement programs, he acknowledged that those had to be addressed in order to deal with the unacceptable levels of debt and deficit,” Sen. Rob Portman (R-Ohio) said.

“He indicated that he had stepped out and taken a risk on some things with his caucus and that he was prepared to continue to do that.”

Sen. Jeff Flake (R-Ariz.) said Obama vowed to challenge Democrats on the need for entitlement reform but urged Republicans to stand up to pressure from conservative activists, such as Grover Norquist, president of Americans for Tax Reform.

“He challenged us to do the same thing in terms of our base on the revenue side,” Flake said. “He mentioned there’s some theories out there that he’s trying to lure everyone into a trap as a way to take back the House. He assured us that he’s simply trying to get a budget deal done.”

McConnell said Obama needs to take a more active role in pressing Democrats to consider entitlement reform.

“He needs to be directly involved. Not, as we used to say, leading from behind, but directly involved. And his job is to deliver the members of his party.

Obama touted his administration’s proposal to reform the corporate tax code without increasing the net level of taxation as an area of common ground with Republicans.

“He went out of his way to reference the fact that the administration has a corporate tax reform proposal that is revenue neutral, that reduces the rate and adds growth. That was a point of general agreement,” Portman said.

The president said he would not accept corporate tax reform unless it was tied to legislation raising tax revenues from other sources, Sen. Roy Blunt (R-Mo.) told reporters.

McConnell said Republicans and the president are “in agreement” on corporate tax reform. But he warned that it should be addressed along with individual tax rate reform, which affects S corporations.

“I don’t see how you can do corporate tax reform only. We have too many S corps and [limited liability corporations] all across America. In fact, it is numerically the greatest number of American businesses [that] don’t pay taxes as corporations and you don’t want to have an adverse effect on American small business,” McConnell said.

House Budget Committee Chairman Paul Ryan (R-Wis.) has unveiled a budget plan that would reduce the individual tax rates to 10 percent and 20 percent.

Obama told Republicans that he is “done” with negotiating individual tax rates, indicating that his focus is on limiting tax deductions and exemptions, instead, according to a source with knowledge of the meeting.

Republicans pressed Obama on the Keystone XL pipeline, as well. The president told lawmakers a decision would be made on approving it in “a matter of months, not years,” said John Barrasso (R-Wyo.), who raised the issue.

A GOP source familiar with the meeting said Obama told lawmakers the Keystone decision has not yet reached his desk and vowed to weigh it “based on science.” The president said the environmental impact of the project is not negligible but conceded the potential damage has been exaggerated by opponents, according to the source.

Obama also suggested the Senate set up a special committee to study regulatory reform, according to Sen. Ted Cruz (R-Texas).

“He suggested the creation of a task force in the Senate to take a look at regulatory burdens and to come up with a proposal of specific regulatory burdens that could be alleviated to improve economic growth and job creation,” Cruz said.

Republican senators praised Obama’s outreach as a sincere effort. But they cautioned he will have to follow up his words with actions to convince them that he’s really serious.

“There was a good discussion, the president seems sincerely interested in trying to set a platform to find common ground on the obvious issues of the day,” Sen. Johnny Isakson (R-Ga.) said. “He called me personally a week ago, spent 20 minutes on the phone. Early on, it looks like a good sincere effort and hopefully it’ll continue, but the proof is ultimately in the pudding. We’ll have to see what actions follow the words.”

— Jordy Yager, Ben Geman and Amie Parnes contributed to this report.

— Published at 3:10 p.m. and updated at 4:45 p.m.