Jefferson City, MO 84° View Live Radar Wed H 87° L 66° Thu H 88° L 66° Fri H 89° L 68° Weather Sponsored By:

Democrats, GOP lock horns on deficit

Democrats, GOP lock horns on deficit

June 3rd, 2011 in News

WASHINGTON (AP) - House Democrats emerged from a meeting with President Barack Obama on Thursday sounding at loggerheads with the GOP over how to reduce the deficit as a crucial deadline for U.S. creditworthiness approaches.

Democratic leaders talking to reporters outside the White House emphasized the need for new revenues as part of any deficit-cutting deal - which generally means new taxes or fees adamantly opposed by Republicans.

They bashed GOP plans to remake Medicare and simultaneously insisted compromise would be reached and acknowledged that the hardest work remains to be done.

"This is a thousand-mile journey that we're on here, and we are taking some first steps," said Rep. James Clyburn, D-S.C.

At stake is an unprecedented default on U.S. debt obligations if Congress fails to raise the federal government's borrowing limit by Aug. 2. The Treasury Department warns failure to act would plunge the economy into crisis.

Republicans are insisting on spending cuts topping $1 trillion as the price for their vote to increase the debt ceiling. The urgency was underscored Thursday as Moody's Investor Service said the U.S. government could lose its sterling credit rating if Congress and the Obama administration don't reach agreement to raise the borrowing limit and reduce deficits over the longer term.

House Democratic leaders insisted they'd get the job done.

"It has to be clear: We're not going to default," said House Minority Leader Nancy Pelosi, D-Calif.

Negotiations on finding spending cuts to meet Republican demands are being led by Vice President Joe Biden, and Democratic leaders involved in the talks said there'd been progress. Areas such as farm subsidies and federal pensions have been targeted for cuts. The Biden group next meets June 9.