Boehner breaks off debt talks

WASHINGTON, July 22 (UPI) -- House Republicans Friday broke off negotiations with the White House on a deal to reduce the federal debt, U.S. House Speaker John Boehner said.

In a letter to House Republicans, Boehner, R-Ohio, said House leaders will deal exclusively with Senate leaders in an effort to head off a government default on Aug. 2, The Hill reported. In the letter, Boehner said President Barack Obama is "adamant" about raising taxes and would not agree to "fundamental changes" to entitlement programs.

"For these reasons, I have decided to end discussions with the White House and begin conversations with the leaders of the Senate in an effort to find a path forward," Boehner wrote.

Shortly after Boehner's letter was made public, Obama went to the White House briefing room and told reporters he had called a meeting of congressional leaders for Saturday at the White House. The president rejected a suggestion that the administration had "moved the goalposts" in talks on raising the debt limit and reducing the debt.

"We have operated aboveboard consistently," he said. "There has been no moving of the goalposts."

Obama accused congressional Republicans of refusing to accept any terms "that compromise(s) any of their ideological positions. None."

Still, he said he is "confident that we will get an extension of the debt limit and we will not default."

Boehner told reporters after the president's news conference he will attend the meeting at the White House Saturday but he said he would focus on negotiations among congressional leaders of both parties. He said he was "convinced that we will not" default and he has "confidence in bipartisan leaders in Congress."

During his news conference late Friday, Boehner accused the White House of "moving the goalposts," saying the president Thursday "demanded $400 billion more" in new revenues over the next 10 years, which he said "was going to be nothing more than a tax increase on the American people." Boehner said negotiators had already agreed on $800 billion new revenues.

Insisting that he does "trust (Obama) as a negotiator," Boehner said, "If the White House won't get serious (about reducing the debt) we will."

The Senate Friday killed the House Republican "cut, cap and balance" bill, and Majority Leader Harry Reid called off a weekend session. The party-line Senate vote was 51-46.

The Republican-led House passed the measure -- which would have cut spending by $111 billion in 2012, capped spending over the next decade and barred more borrowing until Congress passes a balanced-budget amendment to the Constitution -- by 234-190 Tuesday.

Senate rejection had been expected, and Obama had promised a veto, but the vote was seen as necessary before reaching a larger deal to raise the $14.3 trillion national debt ceiling by Aug. 2, The Hill reported.

Reid, D-Nev., then told senators to take the weekend off.

"It looked earlier this week like the Senate would have to originate legislation perhaps as soon as today to avoid default," he said. "Circumstances have changed. The speaker of the House and the president have been working to reach agreement."

Obama's proposed deal with Boehner envisioned $1.5 trillion to $3 trillion in U.S. spending cuts but few tax changes for two years, officials said.

News of the proposed deal angered Reid, who confronted White House budget director Jack Lew during a meeting about secret talks with Boehner, The Hill reported earlier Friday.

"I'm the Senate majority leader -- why don't I know about this deal?" Reid demanded Thursday as Lew walked into the Mansfield Room for a meeting with Senate Democrats, a lawmaker who witnessed the exchange said.

Lew testily replied, "If there's a deal, then the president doesn't know about it, the vice president doesn't know about it and I don't know about it."

Boehner, at a news conference Friday before the Senate vote, also said there was no agreement.

"So the House has done its job and I hope that the Senate will do theirs. And if they don't like our version of cut, cap and balance, guess what? That's what the legislative process is for," he said.

"They can amend it. They can change it. They can send it back over to the House. And, frankly, they ought to take action on that bill."

Democrats were angry Obama was apparently willing to accept big spending cuts in exchange for reforming the tax code at some time in the future as part of a proposal to raise the $14.3 trillion debt ceiling.

The Democratic president and Republican House speaker are coming together on a plan to make sharp cuts in federal agency spending, including at the Pentagon -- perhaps around $1.5 trillion in 10 years. But it would postpone tax-overhaul legislation and cuts to so-called entitlement programs until next year, an election year, pushing back the end to most special tax exemptions, tax deductions and tax credits until at least 2013, the officials told The Washington Post and The Wall Street Journal.

The tax-code overhaul would lower personal and corporate income-tax rates while eliminating or reducing an array of popular tax breaks, such as the deduction for home mortgage interest, the officials said.

One thing Obama said he would not do is use the 14th Amendment to raise the debt ceiling on his own, as former President Bill Clinton and others have urged him to do, using the section saying Congress must honor the federal debt.

The president told a crowd at a "town hall" in Maryland Friday, "I have talked to my lawyers" about the section. "They're not persuaded that that is a winning argument."