By Molly K. Hooper and Ian Swanson - 06/01/11 01:13 PM EDT
Speaker John Boehner (R-Ohio) is raising the pressure on the White House to agree to steep spending cuts as part of a debt-ceiling deal.
Armed with a statement signed by 150 economists who back Boehner’s call for significant spending cuts to be attached to any increase to the $14.3 trillion debt limit, Boehner and the rest of the House GOP conference will meet with President Obama at the White House on Wednesday morning.
The high-profile meeting comes less than 24 hours after the House rejected a “clean” measure to raise the debt ceiling with no spending cuts. Republicans scheduled that vote to prove a debt-limit increase cannot be approved unless it is accompanied by significant spending cuts.
Obama will meet with House Democrats at the White House on Thursday.
The White House has sought to minimize any friction that might come from Tuesday’s vote. Hours before it took place, White House press secretary Jay Carney insisted Obama believed enough Republicans would eventually support raising the debt ceiling for legislation to be approved before an Aug. 2 deadline set by the Treasury Department.
“We believe that an agreement is possible and, we hope, likely,” Carney said. “We also believe that regardless of any other development, the debt ceiling must be and will be raised.”
Vice President Biden is leading talks on the issue, and he and House Majority Leader Eric Cantor (R-Va.) have indicated that about $1 trillion in spending cuts is within reach.
But huge differences between the parties remain over taxes and entitlements.
Republicans have objected to including any tax increases as part of a deficit deal, while Democrats have scored political points by attacking the House GOP’s budget and its proposed reforms to Medicare.
All three subjects are likely to be raised at Wednesday’s meeting.
Boehner released the statement signed by 150 economists, including Reagan-era Secretary of State George Schultz and former Congressional Budget Office Director Douglas Holtz-Eakin, who advised Sen. John McCain (R-Ariz.) in his 2008 presidential campaign, just hours before the White House meeting.
The letter states: “It is critical that any debt-limit legislation enacted by Congress include spending cuts and reforms that are greater than the accompanying increase in debt authority being granted to the president.”
In a statement released early Wednesday, Boehner said “increasing the debt ceiling without significant spending cuts and budget reforms will send a message to American job creators that we still are not serious about ending Washington’s spending addiction, and this will bring further harm to private-sector job growth in America.”
Both the White House and congressional Republicans have played to Wall Street during the debate. Both sides have something to lose from a negative reaction by markets, and House Republicans worked hard ahead of Tuesday’s vote to explain the political move to Wall Street executives.
Most on Wall Street say they’re keeping an eye on the debt talks, but that attention is likely to increase after the July 4 recess, when negotiators would have less than a month to get a deal.
This story was posted at 6:58 a.m. and updated at 9:12 a.m.