DEBT SHOWDOWN

Obama, House Republicans in endgame in debt talks

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WASHINGTON (AP) - In secretive endgame negotiations, President Barack Obama and House Republican leaders reached anew on Thursday for an elusive "grand bargain" deal to cut deficits by $4 trillion or more and prevent a government default, officials said.

(Photo: Associated Press)

House Speaker John Boehner declared that his rank and file generally stood ready to compromise in order to reach an agreement as a way of "getting our economy going again and growing jobs." Obama, in a newspaper opinion piece, said the talks provided an "opportunity to do something big and meaningful."

Still, 12 days before the default deadline, officials stressed that no compromise appeared imminent and that significant differences remained. And new hope of one ran instantly into old resistance: from Republicans opposed to higher taxes and Democrats loath to cut Medicare and other benefit programs.

In a measure of concern among Democrats, party leaders spent nearly two hours meeting with Obama at the White House late Thursday.

Democratic officials familiar with Obama's talks with Republicans said that while some cuts could be agreed upon and even enacted relatively quickly, there were major differences on taxes and savings from benefit programs like Medicare and Social Security.

As an example, there is no agreement on how much additional revenue would be raised through an expected overhaul of the tax code, or how to require Congress to enact cuts to benefit programs.

The officials spoke on condition of anonymity in order to discuss sensitive negotiations.

While talks on a major, long-term agreement continued, a fresh, shorter-term backup plan appeared to be gaining momentum. Under discussion among some House Republicans, that proposal would cut spending by $1 trillion or slightly more immediately and raise the debt limit by a similar amount - enough to postpone a final reckoning until early in 2012.

Both sides maneuvered for political advantage and for leverage in negotiations about which little was publicly known.

"At the end of the day, we have a responsibility to act," said Boehner of GOP lawmakers.

Across the Capitol, however, Senate Majority Leader Harry Reid blamed some of the same Republicans - "tea party extremists," he called them - of blocking a deal.

The sometimes-conflicting information underscored the frenzied final days before a threatened default, when the Treasury would no longer be able to pay all its bills in full and the economy could go into a tailspin as interest rates spiked.

Some Democrats confided they were worried Obama would sign off on an agreement that cuts benefit programs without raising tax revenue, and they peppered Budget Director Jack Lew - in a closed-door meeting in the Senate - with questions about the high-level negotiations.

In an opinion piece in USA Today posted Thursday evening, Obama restated his call for achieving deficit reduction through "historic" amounts of spending cuts but also through "fundamental tax reform."

It was a stance Reid pointedly emphasized Thursday. "My caucus agrees with that - and hope the president sticks with that, and I'm confident he will," the Nevada Democrat said.

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