Obama, House Republicans in endgame in debt talks

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One official said the White House had notified Democratic congressional leaders Wednesday night that Obama and the House leaders appeared to be were closing in on a deal said to include $3 trillion in spending cuts but only a promise of higher revenues to be realized through a comprehensive overhaul of the tax code.

(Photo: Associated Press)

Boehner walked a difficult line of his own, not wanting to anger conservatives who hoped - despite every appearance to the contrary - that they could push far deeper cuts through the Senate in the next few days.

"There is no deal. No deal publicly, no deal privately, there is absolutely no deal," he told conservative talk show radio host Rush Limbaugh.

"We're not close to a deal," said Jay Carney, the White House press secretary.

Another Democratic official said that in fact progress had been made, but Boehner's office declined to say as much.

"While we are keeping the lines of communication open, there is no `deal' and no progress to report," said spokesman Michael Steel.

The government's debt stands at a record $14.3 trillion and has been growing by more than $1 trillion a year. Obama's request for an increase prompted Boehner to say months ago that any rise must be accompanied by spending cuts of at least the same amount.

Publicly, some Republicans insisted they would not entertain any fallback measure as long as a separate House-passed bill was pending in the Senate.

That measure would raise the debt limit by $2.4 trillion while requiring an estimated $6 trillion in cuts and a congressional vote to send the states a constitutional balanced budget amendment for ratification. Sen. Jim DeMint, R-S.C. an influential conservative, said that bill was "the only one that can pass before the Aug. 2 deadline."

But Reid said the legislation "doesn't have one chance in a million of passing the Senate," and privately senior Republicans in both houses were operating on the assumption that it would fail when the vote was taken.

Initially, that vote was set for Saturday, to be followed by an unveiling of an earlier fallback plan crafted by Reid and Senate Republican leader Mitch McConnell of Kentucky. At mid-day, though, Reid announced without explanation the Senate would formally reject the House-passed bill on Friday.

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