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Debt talks to resume after testy 75-minute session
By Carrie Budoff Brown & David Rogers
7/10/11 

President Barack Obama called congressional leaders back to the White House for another round of budget talks Monday, telling them during a testy meeting Sunday that they will gather daily until a deal is reached, Democratic and Republican officials said. 

In a bid to take his case to voters, the president also will hold a press conference Monday morning, the White House announced at the conclusion of the meeting. 

During a 75-minute session Sunday at the White House, Obama told the congressional leaders that America is not a “banana republic,” so he won’t agree to several months-long debt increases that raise fears of a default, according to two Democratic officials familiar with the meeting. 

The president argued several times that negotiators should work toward a $4 trillion package for reducing the deficit rather than the smaller one favored by Republicans, calling on them to stand up to their base to get it done. He said both parties would suffer politically, but they need to do something substantial, said a third Democratic official familiar with the meeting. 

“If not now, when?” the president said to the group, according to the official. 

House Majority Leader Eric Cantor (R-Va.), who spoke most often for the Republicans, argued that a grand bargain that includes new tax revenue would not pass the House, so they should fall back to the $2.5 trillion framework from the talks led by Vice President Joe Biden. 

The meeting, which featured several sharp and frustrated exchanges, broke without settling much other than negotiators’ plans for their next meeting, according to multiple Republican and Democratic officials briefed on the session. 

The setback in the talks comes only three weeks before the Aug. 2 deadline for lifting the debt limit, raising the possibility of a default if Democrats and Republicans fail to make progress soon on a deficit-reduction package, which would be paired with the debt vote. 

Treasury Secretary Timothy Geithner said earlier Sunday that an agreement is needed by the end of next week to allow time for Congress to pass it. 

At the outset of the White House session, one journalist asked, “Can you work it out in 10 days?” 

Obama replied: “We need to.” 

During the meeting, Obama challenged the Republican leaders’ contention that a deal worth about $2.5 trillion would face a smoother path in the House, reminding them that they had said it would be difficult. He told the Republicans that if they think it’s easier to pass a smaller package, then they need to return Monday with a plan for how they would do it, according to the third Democratic official. 

House Speaker John Boehner (R-Ohio) said he agrees with the president that a big deal is preferable but that there is no path for it, said a Republican official briefed on the meeting. 

Republicans also argued that there isn’t enough time to complete the grand bargain — a claim that annoyed the president, according to one source. 

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