Congress seeks debt result, Obama goes to public

[July 16, 2011]  WASHINGTON (AP) -- Congress is working on dual tracks and racing against the clock to raise the nation's debt ceiling while President Barack Obama appeals directly to the public in hopes of influencing a deficit reduction deal that failed to materialize during talks he led at the White House.

"We have to ask everyone to play their part because we are all part of the same country," Obama said Saturday, as he pushed for a package of spending cuts and tax increases that has met stiff resistance from Republicans. "We are all in this together."

In his weekly radio and Internet address, Obama said the wealthiest Americans must "pay their fair share." He invoked budget deals negotiated by President Ronald Reagan and Democratic House Speaker Tip O'Neill, and Bill Clinton and Republican Speaker Newt Gingrich.

"You sent us to Washington to do the tough things, the right things," he said. "Not just for some of us, but for all of us."

But as a critical Aug. 2 deadline approached, the chances that Obama would get $4 trillion or even $2 trillion in deficit reduction on terms he preferred were quickly fading as Congress moved to take control of the debate.

House Republicans prepared to hold a vote next week to allow an increase in the debt ceiling through 2012 as long as Congress approves a balanced-budget constitutional amendment, a highly unlikely outcome.

In the Senate, the Republican and Democratic leaders worked on a bipartisan plan that would allow Obama to raise the debt limit without a prior vote by lawmakers. The talks focused on how to address long-term deficit reduction in the proposal in hopes of satisfying House Republicans.

In the Republicans' address Saturday, Sen. Orrin Hatch of Utah argued for passage of a balanced-budget amendment, blaming Democrats for failing to embrace adequate budget cuts and declaring, "The solution to a spending crisis is not tax increases."

An amendment that requires a balanced budget, he said, "would put us on a path to fiscal health and would prevent this White House or any future White House from forcing more debt on the American people."

The government said Friday it was using its last stopgap measure to avoid exceeding the current $14.3 trillion debt limit. Administration officials, economists and the financial markets have warned that missing the Aug. 2 deadline and precipitating a government default would send convulsions through an already weakened economy.

In a news conference Friday, the president argued that he had the public on his side as in calling for a large deficit reduction package that included spending cuts and increased tax revenues. But Republicans have flatly rejected any proposal from Obama that contains additional revenue from closing tax loopholes, restricting the value of deductions for the rich, increasing tax rates for hedge fund managers or ending oil and gas subsidies.

"This is not a matter of the American people knowing what the right thing to do is," Obama said. "It's a matter of Congress doing the right thing and reflecting the will of the American people."

Obama had held five straight days of meeting with congressional leaders at the White House, but none of the three options he proposed -- deficit cuts of $4 trillion, $2 trillion or $1.5 trillion over 10 years -- were unlocking enough support to increase the debt ceiling by the $2.4 trillion Obama wants to make it last beyond the 2012 elections.

Essentially declaring those discussions over, Senate Republican leader Mitch McConnell said Friday: ""Now the debate will move from a room in the White House to the House and Senate floors."

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Online:

Obama address: www.whitehouse.gov/

GOP address:
www.youtube.com/gopweeklyaddress

[Associated Press; By JIM KUHNHENN]

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