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Obama, congressional leaders talk about debt

By Ashley Killough, CNN
updated 5:20 PM EDT, Wed May 16, 2012
Prior to his meeting with congressional leaders, Obama called for
Prior to his meeting with congressional leaders, Obama called for "some actions right now that would really make a difference."
STORY HIGHLIGHTS
  • President Obama meets with the four top Senate and House leaders
  • He asks that they support passage of measures he outlined in a speech last week
  • Speaker Boehner tells Obama he won't allow a debt ceiling hike without spending cuts
  • The White House says Obama favors a balance of spending cuts and tax increases

Washington (CNN) -- President Barack Obama and congressional leaders met Wednesday to discuss upcoming budget deadlines, one day after House Speaker John Boehner drew a line in the sand over what could be another bitter showdown between the White House and Congress later this year.

The president focused on his "to-do list" for Capitol Hill, a five-step plan of fiscal policies the White House says is aimed at building economic growth. But Boehner's office said the meeting largely centered on the next scheduled debt ceiling increase, set to go to a vote at the end of the year, along with a "fiscal cliff" of expiring tax policies and new spending cuts coming before Congress, all by January 1, 2013.

Along with Boehner, Obama sat down with Senate Majority Leader Harry Reid, House Democratic Leader Nancy Pelosi and Senate Minority Leader Mitch McConnell.

The speaker, according to a statement from his office, told the president he would "not allow a debt ceiling increase without doing something serious about the debt," echoing comments he made at a summit Tuesday in which he demanded massive spending cuts in exchange for an increase in the debt limit.

Obama, according to Boehner's office, said he would propose a debt hike that does not include spending cuts.

Pelosi, however, disagreed with Boehner's characterization of the exchange, telling reporters, "It wasn't that the president said we won't have any cuts."

She said Obama talked about honoring the debt deal reached last year, which included spending cuts, and added, in her words: "Let's honor it with balance."

Asked about the back-and-forth in his daily press briefing, White House Press Secretary Jay Carney reiterated the president's support for a "balanced approach" to tackling the debt, meaning he believes a deficit-reduction deal should require spending cuts, tax increases and entitlement reforms.

"The president's point was, we should not hold the full faith and credit of the United States hostage to one party's political agenda," he said, referring to the GOP, which largely opposes tax increases as a way to control the growing debt.

The sit-down invoked memories of last year's intense battle over a deficit-reduction plan, which led to the brink of a government shutdown and the first-ever downgrade of the U.S. credit rating by Standard and Poor's.

Carney said a major theme of the meeting was how to avoid what he described as "last summer's self-inflicted political crises." But when pressed by reporters on whether there was any sense in the gathering that another gridlock could be averted, Carney pivoted to the leaders themselves.

"I think you have to ask the speaker of the House whether or not he intends, or he believes that it is the right thing to do, for the American people and the American economy to play chicken with the full faith and credit of the United States government," Carney said.

Both Boehner and Pelosi, meanwhile, described the meeting as friendly and cordial.

"It was a good meeting. It was productive," Pelosi said. "We didn't waste each other's time. We had candor. We had friendship. We had an understanding of where we need to go for our country."

Reid's office released a statement saying the senator "made clear his view" favoring "a balanced agreement that pairs smart spending cuts with revenue measures asking millionaires to pay their fair share."

He added, however, that any debt limit talks are premature before the end-of-the-year, $1.2 trillion spending cut takes place, which he said will affect any sort of deficit-reduction plan.

Obama also used the time to push other areas of his legislative agenda he outlined last week in a New York speech.

His "to-do list" includes steps to eliminate tax incentives for companies that ship jobs overseas, cut red tape so responsible homeowners can refinance, invest in affordable clean energy, and help military veterans find employment.

He also addressed pending legislation involving transportation, student loans, domestic violence and paycheck fairness, according to the White House.

Prior to his meeting with the lawmakers, Obama stopped at a Washington deli to push his proposal of a 10% tax credit for small businesses that create new jobs or increase wages -- another item on the "to-do list."

"It's something that in the past has been an idea that garnered support from Democrats and Republicans," Obama said at the deli. "There's no reason why we shouldn't act on that right now."

Discussing the planned meeting with congressional leaders, Obama pointed to a need to further what he called "momentum" in the economy.

"And one of the ways we can sustain momentum is for Congress to take some actions right now -- even though it is election season, even though there is gridlock, even though there is partisanship -- take some actions right now that would really make a difference," he said.

CNN's Deirdre Walsh contributed to this report.

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