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Obama urges Senate Dems to be flexible in budget talks

Obama urges Senate Dems to be flexible in budget talks

WASHINGTON -- President Barack Obama urged members of his party Wednesday to avoid declaring absolute positions in the debate about increasing the federal debt ceiling, a day after House Speaker John Boehner, R-Ohio, said tax increases were "off the table" as part of any agreement.

In an hour-long session with Senate Democrats at the White House, Mr. Obama told his former colleagues not to "draw a line in the sand" in negotiations, said Senate Majority Leader Harry Reid, D-Nev. Showing an unwillingness to compromise, Mr. Obama said, would not only limit the ability to reach a deal with Republicans but also could have a negative impact on financial markets.

Mr. Obama's view diverges not only from that of Mr. Boehner and many congressional Republicans -- who say an increase in the nation's debt limit must be accompanied by large spending cuts -- but also from that of some Democratic activists. The liberal group Moveon.org has urged Democratic lawmakers to declare their opposition to any agreement on the debt ceiling or the federal budget deficit that cuts Medicare spending.

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The White House meeting came as several dozen business groups, including the U.S. Chamber of Commerce and the Financial Services Forum, which represents the nation's largest banks, released a letter that urged lawmakers to take "timely" steps to increase the debt limit, but did not call for immediate spending reductions as well. "Raising the statutory debt limit is critical to ensuring global investors' confidence in the creditworthiness of the United States," the business groups wrote.

Mr. Boehner said in a speech Monday that Republicans would support an increase in the national debt ceiling only if Democrats and the White House agreed to more than $2 trillion in spending cuts to reduce the budget deficit.

A handful of Democratic senators have echoed GOP calls for an increase in the debt ceiling to be conditioned on spending cuts. One of them, Colorado Sen. Mark Udall, said after the meeting Wednesday that he was pleased to hear Mr. Obama express a desire for the party to show "discipline" when it comes to spending. "I heard the president say the same things I've been saying," he said.

The national debt is set to reach its limit of $14.3 trillion within the next week, although Treasury Secretary Timothy Geithner has told lawmakers that he can keep paying the bills through Aug. 2. The Treasury Department estimates that it will need an additional $2 trillion in borrowing authority to get through the end of next year.

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In the White House meeting, Mr. Obama also reiterated his opposition to a proposal backed by some Republicans, as well as Democratic Sens. Claire McCaskill of Missouri and Joe Manchin of West Virginia, that would limit federal spending to no more than 20.6 percent of the nation's gross domestic product.

First Published: May 12, 2011, 4:00 a.m.

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