Obama calls on Congress to help small businesses

May 16, 2012 - 3:40 PM

WASHINGTON (AP) — President Barack Obama and House Speaker John Boehner dug in Wednesday on their already hardened positions on tax increases versus spending cuts as the outlines of another dire debt ceiling showdown emerged.

Following a bipartisan meeting at the White House, neither side suggested room for compromise to avoid a repeat of the last year's gridlock that brought the government to the brink of default. Boehner, R-Ohio, insisted on spending cuts to offset an increase in the nation's borrowing limit, while Obama warned he wouldn't accept more cuts without also extracting tax increases on the wealthiest Americans.

White House press secretary Jay Carney said Obama told lawmakers he "refuses to allow a replay of last summer's self-inflicted political crisis." But he said the president also made clear that he would balk at attempts by Republicans to pay for an increase in the debt ceiling with spending cuts alone.

"The president reiterated that any serious bipartisan approach to tackle our deficit must be a balanced approach, and he made clear his willingness to work with Republicans and Democrats to stake out an agreement along those lines but was just as clear that he would not accept an approach that asks the middle class and senior citizens to make sacrifices without asking for anything more from millionaires and billionaires," Carney said.

Carney wouldn't say how the White House could prevent a showdown if the Republican-led Congress again insists on commensurate cuts.

And Boehner insisted his party would not back down from that demand. A Boehner aide said the speaker told the president he was "not going to allow a debt ceiling increase without doing something serious about the debt."

Republican presidential candidate Mitt Romney has latched on the debt and spending debate as well. In a campaign stop Wednesday in Florida, Romney said he was the candidate who "will stop the spending and borrowing inferno" and accused Obama of being the driving force behind the nation's eye-popping country's $15.7 trillion debt.

Romney's critique ignored a significant reason for the debt: a series of Bush-era tax cuts that the former Massachusetts governor wants to follow with even lower rates. And Romney's own promises to slash domestic spending aren't backed by specifics.

The Treasury Department says the government will hit its borrowing limit later in the year but can use accounting maneuvers to extend the deadline for congressional action to lift the debt cap into early next year. And Boehner suggested Tuesday that Congress may take "a series of stopgap" debt measure measures before an acceptable budget pact can be passed.

The same could be true for a host of other unfinished business that had been expected to file up in a postelection lame-duck session, including extending expiring tax cuts and averting automatic spending cuts at the Pentagon and domestic agencies. But Capitol Hill insiders like Budget Committee Chairman Paul Ryan, R-Wis., and top panel Democrat Chris Van Hollen of Maryland predict lawmakers will probably craft short-term fixes and punt everything to the next Congress and whoever occupies the White House next year.

Last year, Congress and Obama — with Boehner playing a lead role — agreed on a 10-year, $2 trillion-plus package of spending cuts the coming decade. The measure paired caps on domestic agency operating budgets with the promise of $1.2 trillion in further deficit cuts though a deficit supercommittee.

But the supercommittee's failure to reach a deal has forced a scheduled painful round of automatic spending cuts at the Pentagon and other Cabinet agencies next year, along with a 2 percent cut to Medicare providers. Lawmakers are already trying to unwind those cuts, which take effect in January.

Last year's debt showdown resulted in a downgrade of the U.S. government's credit rating.

The White House and Boehner's office described Wednesday's rare bipartisan gathering as cordial. Also at the meeting was Senate Minority Leader Mitch McConnell, R-Ky., and two Democratic lawmakers: Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi.

The president tried to add a friendly touch to the lunchtime gathering by picking up sandwiches from a local deli where he held an event earlier in the day. While the sandwiches may not have helped produce Boehner's office said the speaker was "very pleased" with the sandwiches.

___

Associated Press writer Andrew Taylor contributed to this report.