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. At a news conference Friday, Obama opened the door to a smaller deficit-reduction package without revenue increases.
Obama’s communications director, Dan Pfeiffer, said the president, Vice President Joe Biden, and White House aides were discussing “various options’’ yesterday with congressional leaders and House and Senate aides from both parties.
House Republicans prepared to vote this week on allowing an increase in the government’s borrowing limit through 2012 as long as Congress approved a balanced-budget constitutional amendment, which is highly unlikely. In the Senate, GOP 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 hopes of satisfying House Republicans.
In the Republicans’ address yesterday, Senator Orrin Hatch of Utah argued for passage of a balanced-budget amendment. He said Democrats had not made adequate budget cuts, and said “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.’’
Administration officials, economists, and the financial markets have warned that missing the Aug. 2 deadline and precipitating a government default would seriously harm an already weakened economy.
— Associated Press
Dalai Lama makes visit to the White House WASHINGTON - President Obama met privately with the Dalai Lama, the exiled spiritual leader of Tibet, at the White House yesterday, despite a warning from Beijing that the meeting would risk damaging relations between China and the United States.
Reflecting the diplomatic sensitivity of the visit, the meeting with the Dalai Lama was closed to the news media. China considers Tibet its territory and the Dalai Lama a separatist, although he favors self-rule rather than independence.
In announcing the meeting late Friday, the White House said Obama would express support for a resolution between China and Tibet that protects Tibet’s interests.
The meeting came at a delicate time as China, the largest US creditor, has expressed concern about the risk of a default on US bonds if Obama and congressional Republicans cannot break their impasse over raising the nation’s legal debt limit.
— New York Times
