House Speaker John Boehner called President Obama Friday evening to tell him he is dropping out of the debt talks. He wrote a letter to his Republican colleagues that says, "we couldn’t connect." In the letter, Speaker Boehner said a deal must "implement the principles" of "Cut, Cap and Balance," not increase taxes, and make “fundamental changes” to entitlements. “For these reasons, I have decided to end discussions with the White House,” Boehner wrote to his colleagues.
In a hastily arranged news conference, President Obama said, "It is hard to understand why Speaker Boehner would walk away from this deal." He said the package consisted of $1 trillion of tax revenue but it mostly was made up of spending cuts in defense and domestic spending as well as $650 billion of savings in entitlements. "This was an extraordinarily fair deal," President Obama said.
President Obama called Congressional leaders to the White House tomorrow morning at 11 am. He said they are supposed to come with ideas how to move forward and that his only demand is that the debt ceiling be lifted to last through 2012.
Earlier today, the Senate voted to table - or discard – the “Cut, Cap and Balance Act.” A simple majority was needed to halt proceedings on the measure, which would raise the debt ceiling and move to add a balanced budget amendment to the U.S. Constitution, and the Senate barely reached that threshold with a vote of 51-46. Senate Majority Leader Harry Reid (D-NV) said the bill is “over, it’s done, it’s dead.”
Speaker Boehner spent the day fighting back media reports that he and President Obama are close to a deal. At a Friday morning news conference, Boehner said, “There was no agreement and… frankly [we are] not close to an agreement.”
White House talks with Congressional leaders resumed mid-week after a hiatus as President Obama’s hopes for a deficit reduction deal alongside an increase to the debt ceiling resurfaced after the bipartisan “Gang of Six” Senators released an outline to raise $1 trillion in revenue and cut $3 trillion in spending over the next ten years.
A meeting with Senators Reid and McConnell and the “Gang of Six” took place this morning, and President Obama spoke at a town hall at the University of Maryland, just outside Washington, D.C. this morning.
Unclear if it is still an option, Senators Reid and McConnell have drafted what is widely considered a back-up plan, which would give the President unilateral authority to lift the debt ceiling in three different stages. Should it come to fruition, the Reid-McConnell plan is likely to include spending cuts worth up to $1.5 trillion.
Treasury Secretary Timothy Geithner imposed the early August deadline as the last day the U.S. can pay all of its bills without Congress lifting the debt ceiling.
This morning, Senator Tom Coburn (R-OK) joined the Washington Journal to discuss the debt limit negotiations, “Cut, Cap and Balance Act” and the plan by the “Gang of Six” plan. Rep. Steve Israel (D-NY) also was a guest on the program.