Still No Debt Deal, Not Even Close

By MichaelJames

Jul 21, 2011 10:31pm

ABC News’ Mary Bruce (@marykbruce) reports:

Democratic officials familiar with the ongoing debt talks said tonight that they do not have a deal to reduce the deficit and they are not on the cusp of an agreement.

President Obama continues to push for the biggest deal possible and believes there is still time to reach an agreement to raise the debt ceiling and reduce the deficit before the August 2nd default deadline, but the difficulties remain the same.

According to officials, the president still hopes for a balanced deal that includes deficit reduction, entitlement reforms and revenue increases. Any deal would have immediate cuts to discretionary spending, paired with a commitment to make entitlement cuts and enact tax reforms.

However, Democratic officials said that major disagreements persist over both entitlement and tax reforms.

Some of the big issues left to tackle include the scope of the changes and how to enact mechanisms that ensure a deal is balanced. For instance, negotiators must determine how much to raise revenue through tax reform and how to make sure Congress follows through with entitlement cuts.

While both sides will have to compromise, this deal may cause more turmoil for Democrats who expressed outrage Thursday at the possibility that Obama would accept a deal that does not include immediate tax increases.

- Mary Bruce

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