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US House Speaker abandoning effort for $4 trillion in deficit reductions
WASHINGTON (AP) ' House Republican budget negotiators have abandoned plans to pursue a massive $4 trillion, 10-year deficit reduction package in the face of stiff Republican opposition to any plan that would increase taxes as part of the deal.
House Speaker John Boehner informed President Barack Obama on Saturday that a smaller agreement of about $2 trillion was more realistic.
In a statement issued Saturday evening, Boehner said: "Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes."
Boehner's statement came a day before he and seven of the top House and Senate leaders were scheduled to meet at the White House in a negotiating session and lay out their remaining differences.
A deficit reduction deal is crucial to win Republican support for an increase in the nation's debt ceiling. The government's borrowing capacity is currently capped at $14.3 trillion and administration officials say it will go into default without action by Aug. 2.
Both parties are under pressure from voters to resolve the debt crisis ahead of next year's congressional and presidential elections. Obama is seen as a candidate that is tough to beat, though voters' fears over the economy have been dragging down his numbers.
Obama tried to build political support for an ambitious package of spending cuts and new tax revenue that would reduce the debt by $4 trillion over 10 years. But from the moment he proposed it, Republicans said they would reject any tax increases and Democrats objected to spending cuts in some of their most prized benefit programs, including Medicare, Medicaid and Social Security.
A bipartisan group of lawmakers led by Vice President Joe Biden had already identified, but not signed off on, about $2 trillion in deficit reductions, most accomplished through spending cuts.
But after holding a secret meeting with Boehner last weekend, Obama and his top aides said they believed an even bigger figure was attainable if both parties made politically painful, but potentially historic, choices.
In the end, the pressure from both sides was pushing against Obama's bigger goal.
"I believe the best approach may be to focus on producing a smaller measure, based on the cuts identified in the Biden-led negotiations, that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase," Boehner said.
The White House did not have an immediate reaction.
A Republican official familiar with the discussions said taxes and the major health and retirement entitlement programs continued to be sticking points.
Earlier on Saturday, in his weekly radio and Internet address, Obama appealed to Democrats and Republicans to "make some political sacrifices" and take advantage of an extraordinary opportunity to tackle the government's budget crisis.
He said that it will take a "balanced approach" that mixes limits on domestic programs and the Pentagon, curbs to Medicare and elimination of some tax breaks for the wealthy.