Daily Tax Update - July 6, 2011: White House To Hold Debt Limit Meeting Tomorrow

WHITE HOUSE TO HOLD DEBT LIMIT MEETING THURSDAY:  Tomorrow, congressional leaders will meet with President Obama at the White House to try to reach a consensus on the debt limit and deficit reduction.  The Administration wants a deal by July 22 in order to give negotiators enough time to draft legislation that could be approved by August 2.

  • In remarks yesterday, President Obama reiterated his belief in the importance of a balanced approach to reducing the deficit.  Obama said, "To get there, I believe we need a balanced approach.  We need to take on spending in domestic programs, in defense programs, in entitlement programs, and we need to take on spending in the tax code -- spending on certain tax breaks and deductions for the wealthiest of Americans.  This will require both parties to get out of our comfort zones, and both parties to agree on real compromise.  I’m ready to do that.  I believe there are enough people in each party that are willing to do that.  What I know is that we need to come together over the next two weeks to reach a deal that reduces the deficit and upholds the full faith and credit of the United States government and the credit of the American people."
  • The President also said that he does not support a short-term debt ceiling increase.  The President said, "Now, I’ve heard reports that there may be some in Congress who want to do just enough to make sure that America avoids defaulting on our debt in the short term, but then wants to kick the can down the road when it comes to solving the larger problem of our deficit.  I don’t share that view.  I don’t think the American people sent us here to avoid tough problems.  That’s, in fact, what drives them nuts about Washington, when both parties simply take the path of least resistance.  And I don’t want to do that here.  I believe that right now we’ve got a unique opportunity to do something big -- to tackle our deficit in a way that forces our government to live within its means, that puts our economy on a stronger footing for the future, and still allows us to invest in that future."
  • The President added, "It’s my hope that everybody is going to leave their ultimatums at the door, that we’ll all leave our political rhetoric at the door, and that we’re going to do what’s best for our economy and do what’s best for our people."  Obama added, "Over the July Fourth weekend, my team and I had a series of discussions with congressional leaders in both parties," Obama said yesterday.  "We’ve made progress, and I believe that greater progress is within sight, but I don’t want to fool anybody -- we still have to work through some real differences."
  • While Democrats want the deficit reduction plan to include revenue increases, House Speaker John Boehner warned again yesterday that any plan to increase taxes won’t pass the House.  Boehner said, "We're not dealing just with talking points about corporate jets or other 'loopholes.'"  Boehner added, "The legislation the president has asked for -- which would increase taxes on small businesses and destroy more American jobs -- cannot pass the House, as I have stated repeatedly. . . . I’m happy to discuss these issues at the White House, but such discussions will be fruitless until the president recognizes economic and legislative reality."
  • A vote is likely later this week in the Senate on a nonbinding resolution by Democrats expressing a sense of the Senate that households earning $1 million or more need to make "a more meaningful contribution to the deficit reduction effort."  A vote may also be held on a Republican alternative.

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