WASHINGTON (Reuters) – President Barack Obama will hold separate talks with Senate Democratic and Republican leaders on Monday to try to resurrect stalled negotiations aimed at raising the U.S. debt limit and avoiding default.
Obama will meet on Monday morning with Senate Democratic leader Harry Reid and in the early evening that day with Senate Republican leader Mitch McConnell.
Talks fell apart on Thursday when Republicans walked out over Democrats' demands for tax increases as part of a deficit reduction plan. A deal must be reached by August 2 to avoid a potential default on the country's $14.3 trillion debt.
The top Republicans in Congress, McConnell and U.S. House of Representatives Speaker John Boehner, held fast on Friday to their position that Congress would not accept any tax increases. Boehner said Obama must come to the negotiating table next week with deep spending cuts if he wants a deal.
"The president and his party may want a debt limit increase that includes tax hikes, but such a proposal cannot pass the House," Boehner said in a statement.
The $14.3 trillion U.S. debt ceiling must be increased before August 2 or the Treasury Department will run out of money to pay the country's bills. A default on debt payments could send markets plunging around the world and raise the risk of another U.S. recession.
Boehner said if Obama offers up spending cuts that are at least the size of a debt limit increase -- thought to be around $2 trillion to $2.5 trillion -- and if new budget reforms are put in place, "He has my word that the House will act on it."
These are requirements Boehner and fellow Republican leaders have been voicing for months.
Representative Chris Van Hollen, one of the Democrats who was involved in the failed talks led by Vice President Joe Biden, told Reuters: "What they're saying (Republicans) is 'we have to have everything our way.'"
"They don't want to get rid of tax breaks for oil and gas companies. They don't want to get rid of tax breaks for corporate jets, they don't want to ask the wealthiest Americans to give up some of their tax preferences and they'd rather put the economy at risk" by creating uncertainty over the U.S. credit rating, Van Hollen said.
The Washington Post reported Democrats were seeking about $400 billion in new tax revenues on companies and the wealthy.
"There's not any particular number on the revenue package but we have discussed ... the idea of phasing out some of the tax preferences for very high income individuals, over half a million dollars" as well as ending some corporate tax breaks," Van Hollen said.
(Editing by Jackie Frank)
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