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Tuesday
Jul052011

Obama Sees Progress on Debt Negotiations, but No Solution Yet

Official White House Photo by Pete Souza(WASHINGTON) -- President Obama made an unscheduled appearance Tuesday before reporters to say that some progress has been made in the deeply divided negotiations over the nation's debt ceiling, and "greater progress is in sight."

But he cautioned, there is still a long way to go: "I don't want to fool anybody, we still have to work through our differences."

Obama was adamant that he is not looking for a short term solution to the nation's debt crisis, a solution he said would merely be "kicking the can down the road."

"Right now we have a unique opportunity to do something big to tackle our deficit in a way that forces our government to live within our means," Obama said.

The president invited leaders from both parties and both houses of Congress to the White House on Thursday to continue the debt negotiations. He said both parties need to "get out of their comfort zones" and discuss cuts to spending and tax increases that would offset the nation's debt burden.

"I hope everyone leaves ultimatums and political rhetoric at the door," Obama said.

But both sides remain entrenched in their positions, and the road to compromise is unclear.

House Speaker John Boehner welcomed the prospect of a new round of talks at the White House Thursday, but said in a statement that any talks would be "fruitless" unless Democrats agree to forego any tax hikes.

In the Senate Tuesday, Minority Leader Mitch McConnell renewed his invitation for President Obama to travel to Capitol Hill to talk Republicans about how to move forward. But McConnell made clear that he would not sign on to any deal that raised taxes. Voters, he said, sent Republicans to Washington at the 2010 Midterm election as a message refuting the president.

Last week Obama admonished Republicans for refusing to accept a tax hike, even for the wealthiest Americans, as part of any deal to raise the nation's debt ceiling.

Boehner has led the chorus of Republicans refusing to agree to any tax increases as part of a deal. Last week Boehner shrugged off the Aug. 2 deadline set by the Treasury Department for raising the $14.3 trillion debt ceiling as "artificial" and emphasized that "we cannot miss this opportunity" to close the country's growing budget gap.

Treasury Department officials have warned that a failure by Congress to raise the $14.3 trillion debt limit by Aug. 2 could trigger devastating consequences. Whenever an increase to the limit has been necessary in the past, Congress has never failed to raise the debt ceiling. But to date, with Congress divided and ever more focused on the 2012 elections, lawmakers have shown little sign of coming together on any agreement to raise the red ink limit.

Making matters worse for the White House, the debt stalemate has come as a slew of disappointing reports on the country's struggling economy poured in. Last month employers added only 54,000 new jobs, the slowest month of hiring since last fall, and the unemployment rate ticked up to 9.1 percent. Another report on jobs figures is due later this week.

The struggling jobs market could have serious implications for the president as he seeks re-election next year. No president since Franklin Roosevelt has been re-elected with an unemployment rate higher than 7.2 percent.

Copyright 2011 ABC News Radio

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