Top Republican breaks off debt talks with Obama

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.

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