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As the Aug. 2 default deadline nears, the House Speaker terminates the negotiations, saying the sticking point was Obama's insistence on tax increases
House Speaker John Boehner on Friday walked away from deficit-reduction talks with President Barack Obama, derailing an effort reach an agreement on raising the debt limit and avoiding a U.S. government default, according to CBS News:
"In the end, we couldn't connect. Not because of different personalities, but because of different visions for our country," Boehner said in a letter to his Republican colleagues. He said Obama " is emphatic that taxes have to be raised" and "adamant that we cannot make fundamental changes to our entitlement programs."
The Ohio Republican added that he would negotiate directly with Senate leaders to try to find a compromise by the Aug. 2 deadline to avert the government defaulting.
Boehner's action came a day after reports that he and Obama were getting close to a landmark agreement that would save $3 trillion over the next decade, but the terms of that deal had angered Democrats, Reuters reported. They pointed out that the tentative agreement didn't include any immediate provision to increase tax revenue and that it would probably force cuts in so-called entitlement programs, including Social Security and Medicare.
Obama said that the deal he had offered Boehner was an “extraordinarily fair deal,” Bloomberg News reported:
“It is hard to understand why Speaker Boehner would walk away from this kind of deal,” the president said.
According to the Washington Post, Obama spoke at a town hall meeting at the University of Maryland in College Park on Friday, where he told the audience:
“We can’t just close our deficit with spending cuts alone.”
“If we only did it with cuts, if we did not get any revenue to help close this gap . . . then a lot of ordinary people would be hurt, and the country as a whole would be hurt,” Obama said. “And that doesn’t make any sense. It’s not fair. And that’s why I’ve said, if we’re going to reduce our deficit, then the wealthiest Americans and the biggest corporations should do their part as well.”
Washington reached its debt ceiling on May 16 but has been using spending and accounting adjustments and higher-than-expected tax monies to pay the bills and continue operating until the deadline in early August, according to AFP.
Finance and business leaders have warned that failing to reach an agreement to raise the debt ceiling would be dangerous for the world economy and the U.S. president has said that a government default could cause "Armageddon."
Earlier on Friday, the Senate voted down a bill from the Republican-controlled House that would have required a balanced-budget amendment and huge budget cuts, but no tax increases, according to the Washington Post.