WASHINGTON — (AP) — President Barack Obama and congressional leaders were regrouping after House Republicans abandoned efforts for a deficit reduction package of $4 trillion over 10 years. The potential deal had unnerved lawmakers in both parties.
House Speaker John Boehner announced late Saturday that he was now looking for a deal about half that size and said that chances for a bigger agreement succumbed to the White House's insistence on substantial new tax revenue.
Administration officials said Obama would press for a bigger bargain one last time at a White House negotiating session Sunday evening.
A deficit reduction agreement is crucial to winning Republican support for an increase in the nation's borrowing limit. The government's borrowing capacity is currently capped at $14.3 trillion and administration officials say the United States will go into default without action by Aug. 2.
Expectations for Sunday's meeting took an abrupt turn Saturday after Boehner informed Obama that a package of about $2 trillion identified but not agreed to by bipartisan negotiators was more realistic.
In a statement, 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, R-Ohio, notified Obama of his decision to settle for a smaller number early Saturday evening while the president was at Camp David.
Obama planned to return to Washington on Sunday afternoon. The meeting with Boehner and seven other House and Senate leaders is set for 6 p.m. EDT.
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.
"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.