U.S. President Barack Obama (R) and Speaker of the House John Boehner are joined by Congressional leaders as they discuss ongoing efforts to find a balanced approach to deficit reduction in the Cabinet Room of the White House in Washington July 7, 2011.LARRY DOWNING/REUTERS
U.S. President Barack Obama and congressional leaders emerged from talks on Thursday still far apart on ending a deadlock over spending and taxes and said negotiators will work through the weekend in search of a compromise that would avoid a debt default.
Mr. Obama and congressional leaders aimed for a broad deal in negotiations that could involve changes to popular entitlement programs like Social Security. This follows weeks of acrimony and political finger-pointing.
Mr. Obama, briefing reporters after 90 minutes of talks with congressional leaders, said both sides were still far apart and that negotiators will work through the weekend to find each side's bottom line.
He said he will hold another round of talks with House of Representatives Speaker John Boehner, Washington's top Republican, and other lawmakers on Sunday for what he hopes will be "the hard bargaining that's necessary to get a deal done."
"Everybody acknowledged that there's going to be pain involved politically on all sides but our biggest obligation is to make sure that we are doing the right thing," he said.
An Aug. 2 deadline is looming to raise the $14.3-trillion (U.S.) debt ceiling. Failure to do so would risk tossing the government into default, a move that could push the country back into recession and send shock waves through financial markets around the globe. Mr. Obama wants a deal by July 22 to avoid rattling markets.
"We're in the end game here," said White House spokesman Jay Carney.
Normally a routine vote, the debt ceiling has been embroiled in partisan politics, with Republicans seeking to impose deep spending cuts to reduce the $1.4-trillion U.S. budget deficit and satisfy their conservative Tea Party supporters.
Mr. Obama, seeking to avoid angering his liberal base ahead of his 2012 re-election bid, wants tax increases on the wealthy to lessen the pain of spending cuts.
"I want to emphasize that nothing is agreed to until everything is agreed to and the parties are still far apart on a wide range of issues," Mr. Obama said.
Mr. Boehner repeated ahead of the talks that Republicans are "not interested in raising taxes."
He said, however, that comprehensive tax reform is on the table and that changes are needed in benefit programs for the poor and elderly to ensure their long-term viability.
"We believe that comprehensive tax reform, both on the corporate side and the personal side, will make America more competitive, help create jobs in our country, and is something that is under discussion," Mr. Boehner told a Capitol Hill news conference.
With Republicans showing new flexibility on taxes, Democrats say Mr. Obama will push negotiators to double their target to $4-trillion in budget savings over 10 years.
That would be an ambitious goal, but there have been a few hints of progress since talks hit a brick wall two weeks ago.
Mr. Obama and Mr. Boehner have recently discussed broadening the deal to tackle politically sensitive overhauls of the tax code and benefits like Social Security, Medicare and Medicaid, a Republican aide said.