Debt talks turn on tax hikes, as president prepares to update public Update: President hopes parties will "leave ultimatums at the door"

The president this afternoon will update the public as to the status of the negotiations to cut government spending and raise the nation’s debt ceiling. The talk comes after Senate Republicans this weekend said they were increasingly worried the White House and Congressional leadership would cut a last-minute debt-ceiling deal, leaving Congress with no time to review the specifics before a vote.

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“I’m really worried about it – and we’re not going to rubber-stamp something sent down from the White House,” Sen. Jeff Sessions (R., Ala.) said on Fox News Sunday.

Republican Sen. John Cornyn of Texas, in a separate appearance on the same show, said President Barack Obama, Sen. Minority Leader Mitch McConnell (R., Ky.) and House Speaker John Boehner (R., Ohio) “are the only people who can cut the deal.” But he worried that the package would not be able to muster enough votes to pass the House and Senate.

“What I’m concerned about is that … we’re running up against this deadline and they’re going to try to present it as a fait accompli,” Cornyn said. “Nobody is going to have time to read it or consider the implications of it. And [the president is] going to say you have to pass it or the economy is going down the tubes. That’s just irresponsible.”

Meanwhile, Democrats have hinted at what we’re likely to hear from the president later this afternoon (the president’s press conference last week also provided a bit of a preview). That is, Democrats have lately made no real secret of their end goals for the deficit reduction talks. They seem determined to use the debt ceiling deadline to garner tax hikes.

Democrats have floated ideas that could raise tax revenues by some $400 billion over the next decade as they negotiate deficit reductions with Republicans, according to people familiar with the plan, posing the most contentious issue as talks reach a critical stage this week. …

As details emerge from the closed-door talks, … it is becoming clear the tax plans on the table would go further [than the elimination of tax breaks for “millionaires and billionaires, or for hedge fund managers and corporate jet owners,” as the president said]. For instance, according to people from both parties familiar with the discussions, the administration’s plan would cap itemized deductions for families with adjusted gross income, or income after certain deductions and other breaks, of $250,000 and up, not just those earning $1 million or more. And it would eliminate a tax-accounting methodology employed by a broad swath of U.S. businesses, including many small firms.

Republicans generally say government spending is the real problem, even as some say they are open to some “revenue increases,” a term that has come to signify tightening of existing breaks. Americans “don’t think they need their taxes raised, and I don’t either,” Sen. John McCain (R., Ariz.) said Sunday on CNN’s “State of the Union.” At the same time, Mr. McCain suggested willingness to consider “certain revenue raisers,” without elaborating.

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The debt ceiling debate cannot possibly be construed as a win for Republicans if they cave on tax increases and, no matter how secretively Democrats behave, Republicans won’t be able to pretend they didn’t see what was coming.

Now is certainly the time for the White House and Democratic leadership to fully reveal the results of the Biden talks and give the American people a chance to say how they feel about those tax hikes, as Republicans have been saying. But now is also the time for Republicans to prepare to reject a deal that includes tax increases and to be ready to stand entirely on principle. They’ve said no tax increases. They better mean no tax increases. The consequences of not raising the debt ceiling as soon as possible probably appear extraordinarily painful to any politician who understands what would have to happen in that case to avoid default — but to any concerned American citizen in Congress or outside of it, it should be obvious that such conviction on the part of politicians might be what it will take to make the point that the nation has a spending problem, not a revenue problem.

Best-case, wishful-thinking scenario: The administration presents a deal with deep spending cuts and no tax increases and Republicans will have steeled themselves for nothing.

Update: In his brief status update just minutes ago, the president said he has invited both Republicans and Democrats to the White House Thursday to work through the “real differences” that still exist with regard to a debt ceiling deal.

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“Most of us already agree we need to find trillions in savings over the next decade,” the president said. “To get there, I believe we need a balanced approach. …  This will require both parties to get out of their comfort zones and to agree to real compromises. We need to come together over the next two weeks to reach a deal that reduces the deficit. … I’ve asked both parties to come here to the White House on Thursday. It’s my hope that everyone will leave our ultimatums at the door, that we’ll leave our political rhetoric at the door and do what’s best for our economy and the American people. This should not come down to the last second.”

Part of that balanced approach, the president said, will include examining “spending in the tax code.”

One wonders why, if the president doesn’t want this to come down to “the last second,” he didn’t invite both parties to open discussions sooner.

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