President Obama told congressional leaders tonight that he is prepared to make the tough decisions on entitlement spending to reach a deal on raising the debt ceiling and cutting the deficit, a Democrat familiar with the negotiating process told ABC News.
But if Republicans are not willing to do the same regarding taxes, the president asked them during a meeting at the White House, what is their alternative?
After meeting for 75 minutes, congressional leaders will be back at the White House Monday afternoon to continue negotiations.
Monday morning the president will hold a news conference on the matter, making his case to the American people about why tax rates for wealthier Americans and corporations need to be raised as part of a deficit reduction package of at least $4 trillion over the next decade.
Republicans say House Speaker John Boehner, R-Ohio, sought a similarly sized package that would reduce and reform entitlement spending and to cut and cap discretionary spending. The bill -- which would also raise the debt ceiling through November 2012 -- would also contain language committing to principles of tax reform, which key House and Senate committee chairmen would then turn into actual numbers.
Talks broke down, Republicans said, when the president would not commit to the principle that everyone's tax rates would come down.
Also in tonight's meeting, Obama again took the idea of a short-term debt ceiling fix off the table. Whatever Congress passes in terms of deficit reduction, the debt ceiling needs to be raised until after November 2012, a Democratic briefing on the discussions told ABC News.
The president also told congressional leaders to come back Monday with a view on what could pass both the House and the Senate.
A Democratic aide familiar with the process said that Boehner "put on the table letting the Bush tax cuts for the wealthy expire and banking the revenue and then he bailed. The speaker couldn't take the heat from the Republican caucus."
Although Boehner warned Saturday evening that the two sides should "focus on producing a smaller measure, based on the cuts identified in the [Vice President Joe] Biden-led negotiations," Democrats involved in the negotiations say they still prefer to go for the "grand bargain" that would cut closer to $4 trillion over 10 years.
"We came into this weekend with the prospect that we could achieve a grand bargain," House Minority Leader Nancy Pelosi said in a statement following the meeting. "We are still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.
"This package must do no harm to the middle class or to economic growth," the California Democrat said. "It must also protect Medicare and Social Security beneficiaries, and we continue to have serious concerns about shifting billions in Medicaid costs to the states."
A senior aide to the speaker said Boehner told the leaders that he still "believes a package based on the work of the Biden group is the most viable option at this time for moving forward."