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Obama Says No Short-Term Deal On Federal Debt


President Obama is insisting that now is the time for a far-reaching deal on the federal debt. The president stepped before the White House press corps this morning. He warned that if there's not a deal soon to raise the debt ceiling, allowing more borrowing, the U.S. will default on its obligations. And he said he will not sign a short term deal that would postpone for a month, or a few months.

President BARACK OBAMA: If we think it's hard now, imagine how these guys are gonna be thinking six months from now in the middle of election season when they're all up. It's not going to get easier, it's going to get harder. So, we might as well do it now. Pull off the Band-Aid, eat our peas.

INSKEEP: All this came after a weekend in which a potential deal seemed to fall apart. NPR's Ari Shapiro covers the White House. He's in our studios. Ari, good morning.


INSKEEP: Let's review where we're at here. What's the danger, at least according to the president, and how much time is left?

SHAPIRO: OK, so August 2nd is the drop dead deadline, according to the president and Treasury Secretary, Tim Geithner. After that, the U.S. could default on its debts. The president says all of the negotiators agree that you've got to get a bargain before August 2nd with enough time for congress to draft and vote on the legislation. So, last week, you know, White House spokesman Jay Carney said we were in the endgame. This week, it's like we're in the end of the endgame and negotiators are meeting everyday to try to strike a deal.

INSKEEP: Well, I'm trying to figure out what happened here. The president, in his news conference, praised just a few minutes ago House Speaker John Boehner, even thought Boehner is the one who said, over the weekend, the deal is off. What happened here?

SHAPIRO: Well, last week, Speaker Boehner and President Obama seemed to be on the same page about a sweeping, $4 trillion, over a decade, agreement that could overhaul entitlement programs like Social Security, Medicare and Medicaid; it could change the tax code. Both men seem to be on the same page. The second in command in the Republican House, Eric Cantor, the majority leader, counted votes and told Speaker Boehner, this ain't gonna happen. You can't get this through the Republican House. So on Saturday night, Speaker Boehner came back and told President Obama, we've got to shoot for something smaller in the 2 to $3 trillion range.

Now, President Obama has come back and said, we're still going for the $4 trillion deal because the smaller one might not be any easier to pass.

INSKEEP: I want to try to zoom in, Ari, on this question of tax increases, which seems to be the major difference. And it seems that both parties are trying to paint a cartoon image of the other side. There's the liberal Democrats who want to grab more and more of your money right now, and destroy the economy; against the conservatives who utterly refuse to compromise in any way, whatsoever that's the cartoon vision. But when I watch the president's discussions, and read some statements on a radio program today, by Speaker Boehner, there does seem to be a little room even now for some kind of compromise. Both men spoke about tax reform, changing around a lot of the tax rates so that more people pay into the system and there might be more revenue. They both still seem to be on the same page, there.

SHAPIRO: Yeah, the fundamental question is how do you define a tax increase? If you eliminate loopholes, if you change the structure of the tax code in fundamental ways, the overall tax rates might drop for everyone, but you could still get more tax revenue into the government coffers. That's a difficult thing to do, and it might be impossible to do it in a week. So, then the question becomes, can you get a deal in a week that somehow binds a future congress to sort out all these details that may have been what looked impossible over the weekend, and made Republicans say we gotta go for something smaller.

INSKEEP: And the fundamental question for both men, is can they bring along enough people, in their own party, in order to get this through both houses of congress whatever deal.

SHAPIRO: And can they convince the American people, that Washington is not simply paralyzed. I think part of this morning's press conference was an effort to get the American people to believe that this is, at least, not President Obama's fault. Everyone is sort of pointing fingers, now, saying we want to do the right thing for the American people. It's the other guys who are making Washington broken.

INSKEEP: Ari, thanks very much.

SHAPIRO: You're welcome.

INSKEEP: NPR's White House correspondent, Ari Shapiro, telling us, this morning, of news conference by President Obama, insisting that now is the time for a deal on the federal debt. He says he will not sign a short term deal. We'll bring you more on this story as we learn it. It's MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.