President Obama: We Need to Decide by Friday if We’re Working on a Compromise Deficit Reduction Bill or Just Some Way to Avoid Default

Jul 13, 2011 6:59pm

ABC News' Jake Tapper reports:

Amidst discussions of credit ratings agency Moody's putting the U.S. on review for downgrade, President Obama told congressional leaders today that by Friday they all have to decide what they’re doing: a compromise package to reduce the deficit, or if there’s no willingness to compromise, some other way to raise the debt ceiling and avoid defaulting.

The president made the declaration at today's deficit reduction meeting in the Cabinet Room, which began at 4:24 p.m. ET and ended at 6:16 p.m.

A Democrat familiar with the negotiations, said that the group went through discretionary and mandatory spending cuts – more than $1 trillion over 10 years – that had been discussed in the earlier talks led by Vice President Joe Biden.

The group agreed to return to the table tomorrow afternoon to talk about mechanisms for those cuts —  firewalls and triggers — and possibly to address health care spending (Medicare and Medicaid) and a possible extension of the payroll tax cut 

House Majority Leader Eric Cantor, R-Va., raised yet again the possibilty of a short-term fix, which President Obama , seemingly frustrated — according to Republicans — shot down, abruptly ending the meeting.

House Speaker John Boehner, R-Ohio, argued for serious spending cuts, arguing against gimmicks that Washington D.C. has used in the past.

"We're not doing that anymore," Boehner said, according to a Republican congressional aide.

-Jake Tapper

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