WASHINGTON, (Reuters) – U.S. House Speaker John Boehner broke off talks with President Barack Obama yesterday on a deficit-reduction deal to prevent a devastating default and said he would try to hammer out an agreement through the Senate.
In a dramatic turn of events with the deadline to raise the U.S. debt ceiling just 11 days away, a stern-faced Obama expressed frustration at the Republican leader’s move, saying it was “hard to understand why Speaker Boehner would walk away from this kind of deal.”
Boehner, in a letter to fellow lawmakers, said he and Obama were unable to reach agreement on a broad deficit reduction package they had been negotiating and that the two “had different visions for our country.”
A deep divide over tax revenue was at the heart of the collapse in negotiations, which derailed an effort to craft a sweeping $3 trillion deficit-cutting plan that now seems beyond reach. Both sides blamed the other for the impasse.
With the Aug. 2 deadline fast approaching for Congress to increase the $14.3 trillion debt ceiling, Boehner said he would begin talks with Senate leaders to “in an effort to find a path forward.” An aide said a deal needs to be set by Monday. “We have now run out of time,” Obama told reporters. He insisted he had made an “extraordinarily fair” offer to Boehner but when the Republican stopped returning his calls on Friday it became clear that he would not accept it. The president said he was summoning Democratic and Republican leaders to the White House today in a last-ditch effort to find a path forward on raising the debt limit.
Failure to act could push the United States back into recession and unleash global financial chaos.
Obama warned that failure to reach an agreement on the debt ceiling would also increase the chance of a harmful downgrade in America’s top-notch credit rating. Putting the onus on Obama, Boehner said: “The president is emphatic that taxes have to be raised.