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    July 12, 2011

Obama: Debt Deal Needed to Guarantee Pension Checks

   VOA News
   President Barack Obama sits with House Speaker John Boehner of Ohio, as
   he meets with Republican and Democratic leaders regarding the debt
   ceiling, in the Cabinet Room of the White House in Washington, DC, July
   11, 2011
   Photo: AP
   President Barack Obama sits with House Speaker John Boehner of Ohio, as
   he meets with Republican and Democratic leaders regarding the debt
   ceiling, in the Cabinet Room of the White House in Washington, DC, July
   11, 2011

   U.S. President Barack Obama said he can not guarantee there will be
   money to pay millions of pension checks scheduled to go out on August
   3, unless a deal can be made with opposition Republicans on difficult
   debt issues.
   He spoke in a TV interview with CBS, which put some of his remarks on
   its website Tuesday.
   The president and Republicans in Congress have sharply different ideas
   on how to raise the $14.3 trillion legal limit on the amount of money
   Washington can borrow. They have to make an agreement by August 2 or
   face the possibility that the United States would have to default on
   some payments.
   Obama has scheduled another in a long series of negotiations with
   congressional leaders, but the two sides appeared to be getting further
   apart before the talks began. The top Senate Republican, Mitch
   McConnell, said it may not be possible to get a long-term solution to
   the budget problem as long as Obama is in office. McConnell called the
   president's proposals "smoke and mirrors" (a magician's illusion).
   The president proposes a $4-trillion package of spending cuts and
   revenue increases over 10 years, but the Republicans say they will not
   allow tax hikes, and want to focus only on slashing government
   spending.
   Democrats strongly oppose cuts in popular social programs for the poor
   and elderly. They say increasing taxes on the wealthy and big
   corporations is essential because the government needs more revenue to
   close the budget gap.
   Republicans say it makes no sense to raise taxes on wealthy people who
   can invest in the economy and create jobs. The speaker of the House of
   Representatives, Republican John Boehner, has said no deal can pass the
   House unless it rules out tax increases and cuts spending.
   Treasury Secretary Timothy Geithner said Tuesday the two sides
   understand what it will take to make a deal and will come to an
   agreement. He has warned previously that failing to raise the $14.3
   trillion legal limit on what the government can borrow to pay its debts
   would be "catastrophic."

   Some information for this report was provided by AP.

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