Boehner, rejecting tax hikes, seeks smaller debt deal

WASHINGTON — House Speaker John Boehner, refusing to accept a debt reduction plan with higher taxes, threw Sunday's White House talks into turmoil late Saturday when he said he wants only a medium size compromise, not the big proposal President Barack Obama is seeking.

Obama plans to host another round of discussions at the White House later Sunday, and there had been optimism that negotiators could at least agree on the parameters of a deal.

They're trying to find a way to reduce federal deficits over the next 10 years, deficits expected to total about $7 trillion. The White House wants a $4 trillion plan with a mix of spending cuts and higher taxes. Republicans have refused to budge on taxes.

Any deal would be attached to legislation to raise the nation's debt limit, now $14.3 trillion. Treasury Secretary Timothy Geithner has said that if the limit is not raised by Aug. 2, the government could default, triggering an economic crisis.

Boehner has a history as a compromiser, but his 240-member House of Representatives Republican caucus has been adamant about no new revenues.

So Saturday night, in a statement, Boehner made it clear where he stood: He wants a deal about half the $4 trillion Obama is aiming for.

"Despite good faith efforts to find common ground," Boehner said, "the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure." He suggested using as a guide the $2 trillion in savings discussed during bipartisan talks, headed by Vice President Joe Biden in May and June.

The White House offered a measured response. "The president believes that solving our fiscal problems is an economic imperative," said White House communications director Dan Pfeiffer. "But in order to do that, we cannot ask the middle-class and seniors to bear all the burden of higher costs and budget cuts. We need a balanced approach that asks the very wealthiest and special interests to pay their fair share as well, and we believe the American people agree.

"Both parties have made real progress thus far, and to back off now will not only fail to solve our fiscal challenge, it will confirm the cynicism people have about politics in Washington," Pfeiffer said. "The President believes that now is the moment to rise above that cynicism and show the American people that we can still do big things. And so tomorrow, he will make the case to congressional leaders that we must reject the politics of least resistance and take on this critical challenge."

Congressional Democrats were livid. "Americans have a right to expect their leaders to rise above partisanship and do the right thing for our economy and the middle class," said Senate Majority Leader Harry Reid of Nevada.

Obama is pushing a series of tax increases, including limits on tax deductions for higher income people and ending some corporate tax breaks. House Majority Leader Eric Cantor, R-Va., said last week the GOP might be open to scaling back some corporate breaks, but only if there were offsetting tax cuts.