DEBT SHOWDOWN

Debt negotiations resume briefly Saturday at White House

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The political theater played out even as the deadline neared. Barring action by then, the Treasury will be unable to pay its bills. That could cause interest rates to rise, threaten the U.S. economic recovery and send shock waves around the globe.

Boehner will be a part of today's debt talks. (Photo: Associated Press)

The deadline pressure hasn't seemed to bring the parties closer, even though they all insist they do not want a default.

For the first time since talks began, Obama declined to offer assurances that a default would be avoided, although moments later he said he was confident of that outcome.

Obama said Boehner left a deal on the table that was better for Republicans than for Democrats, with $2.6 trillion in cuts outweighing new tax revenue of $1.2 trillion. The president said he was losing confidence that the underlying deficit problems would be dealt with even if the borrowing limit rose.

"I've been left at the altar now a couple of times," Obama said.

Still, aides on both sides said there was agreement on gradually raising the age of eligibility of Medicare from 65 to 67 for future beneficiaries, and slowing the increase in cost-of-living raises in Social Security checks.

Even by the recent standards of divided government, Boehner's decision triggered an extraordinary evening Friday as the Democratic president and then the Republican speaker maneuvered for political position on this vital issue.

Unspoken, yet unmistakable in all the brinkmanship was the 2012 election campaign, still 18 months away, with the White House and both houses of Congress at stake.

Private, sometimes-secret negotiations had veered uncertainly for weeks, generating reports as late as Thursday that the two sides were possibly closing in on an agreement to slash spending. That triggered a revolt among Democrats who expressed fears the president was giving away too much in terms of cuts to Medicare and Social Security while getting too little by way of additional revenues.

Obama said his only requirement for an agreement was legislation that provides the Treasury enough borrowing authority to tide the government over through the 2012 election. Boehner said he had little interest in a short-term extension either.

Republican aides said Obama had upped his demand for higher taxes during the week. The aides said administration officials had tacitly agreed to $800 billion in new revenue over 10 years but that the White House backed away and wanted $400 billion more.

Aides said the two sides were not able to bridge their differences over the triggers designed to force Congress to enact both tax changes and cuts to Medicare and other benefit programs by early next year. Both sides also were apart on the size of cuts for Medicaid, the health care program for the poor and disabled.

Yet aides on both sides said the negotiations had yielded agreement for cuts of $250 billion from Medicare.

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