President Obama challenged Republicans on Monday to offer him their tax reform proposals for resolving the debt ceiling dilemma as he pushed for a deal that the two parties could agree to before the August 2 deadline on raising the debt limit.

In a news conference to update the public on the status of negotiations, Obama emphasized that he was pushing for the largest possible deal to head off the need to raise the debt ceiling again before the next elections.

“What I emphasized to the broader group of congressional leaders yesterday is now is the time to deal with these issues,” he said. “If not now, when? I've been hearing from my Republican friends for quite some time that it is a moral imperative for us to tackle our debt and our deficits in a serious way. I've been hearing from them that this is one of the things that's creating uncertainty and holding back investment on the part of the business community. And so what I've said to them is, let's go.”

Obama met Sunday evening with congressional leaders from both parties to discuss a budget deal, but the meeting reportedly broke up after about 75 minutes with the two sides still at an impasse over tax increases. On Saturday evening, Speaker of the House John Boehner, R-Ohio, said Republicans would prefer to have a smaller package of spending cuts instead of the larger package of spending cuts and tax increases that the Obama administration had insisted be part of the deal.

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Boehner said in a statement Saturday. “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.”

Obama, however, would prefer to strike a deal on some $4 trillion in deficit reductions over 10 years instead of the $2.4 trillion package that now appears more likely given Republicans’ refusal to consider tax hikes. The administration is trying to raise the debt limit from $14.3 trillion to $16.7 trillion by August 2 to prevent a default on the U.S.’s obligations.

Obama said Monday that it was possible to construct a package that would involve both parties in taking on their “sacred cows,” including “meaningful changes to Medicare, Social Security, and Medicaid that would preserve the integrity of the programs and keep our sacred trust with our seniors, but make sure those programs were there for not just this generation but for the next generation; that it is possible for us to bring in revenues in a way that does not impede our current recovery, but is fair and balanced.”

Obama also said that reports about the administration pushing for tax increases this year were inaccurate. “There's been a lot of information floating around there,” he said. “I want to be crystal clear: Nobody has talked about increasing taxes now. Nobody has talked about increasing taxes next year. What we have talked about is that starting in 2013, that we have gotten rid of some of these egregious loopholes that are benefiting corporate jet owners or oil companies at a time where they're making billions of dollars of profits. What we have said is as part of a broader package we should have revenues, and the best place to get those revenues are from folks like me who have been extraordinarily fortunate, and that millionaires and billionaires can afford to pay a little bit more—going back to the Bush tax rates.”

Obama added that he was open to hearing ideas from Republicans about alternative approaches to tax reform.

“And what I've also said to Republicans is, if you don't like that formulation, then I'm happy to work with you on tax reform that could potentially lower everybody's rates and broaden the base, as long as that package was sufficiently progressive so that we weren’t balancing the budget on the backs of middle-class families and working-class families, and we weren’t letting hedge fund managers or authors of best-selling books off the hook,” he said. “That is a reasonable proposition. So when you hear folks saying, well, the President shouldn’t want massive, job-killing tax increases when the economy is this weak—nobody is looking to raise taxes right now. We're talking about potentially 2013 and the out-years. In fact, the only proposition that's out there about raising taxes next year would be if we don't renew the payroll tax cut that we passed in December, and I'm in favor of renewing it for next year as well. But there have been some Republicans who said we may not renew it.”

Obama emphasized that they would continue meeting until they resolve the impasse, and he would not just sign a temporary extension for another 30, 60 or 90 days. “I’ve been very clear to them: We’re going to resolve this, and we’re going to resolve this for a reasonable period of time, and we’re going to resolve it in a serious way,” he said. “And my hope is, is that as a consequence of negotiations that take place today, tomorrow, the next day and through next weekend, if necessary, that we’re going to come up with a plan that solves our short-term debt and deficit problems, avoids default, stabilizes the economy, and proves to the American people that we can actually get things done in this country and in this town.”

Sen. Orrin Hatch, R-Utah, the ranking Republican member on the Senate Finance Committee, said that tax hikes are the wrong approach, and that tax increases are inevitable anyway even if Congress does nothing.

“The President needs to stop listening to his liberal allies who want to raises taxes at all costs,” he said in a statement. “Middle-class families and small businesses understand that raising taxes on those who are trying to lead our economic recovery is the absolute wrong approach at the wrong time. The President can try to call it something different, but the bottom line is that all he has offered American taxpayers and our struggling economy is tax hikes. I’d remind the administration that even if none of their proposed tax hikes take effect, revenue will go over its historical average of 18 percent of our nation’s economic output. So, taxes are already headed higher than they’ve historically been, and they want to raise taxes even more?”

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