Obama, lawmakers still divided over debt deal

He and congressional leaders remained divided over the size and the components of a plan to reduce long term deficits.Noting the need to work out an agreement over the next 10 days, the president and lawmakers agreed to meet again.Obama and the eight top House and Senate leaders assembled in the White House Cabinet Room for about 90 minutes during a rare Sunday session, less than 24 hours after House Speaker John Boehner abandoned plans to negotiate a massive $4 trillion deal for reducing the debt.As the meeting opened, Obama and the leaders sat around the table in casual dress. Asked whether the White House and Congress could work it out in 10 days, Obama replied, We need to.Obama also sought to use the power of his office to sway public opinion, scheduling a news conference for Monday morning, his second one in less than two weeks devoted primarily to the debt talks.Time is becoming increasing precious in the negotiations. The deficit reduction talks are linked to the governments need to increase its borrowing limit, now capped at $14.3 trillion. The Obama administration says if the debt ceiling is not raised by Aug. 2, the nation would default on its obligations, with potentially calamitous financial consequences worldwide.The International Monetary Funds new chief, Christine Lagarde, said that if the US fails to act, she foresees interest hikes, stock markets taking a huge hit and real nasty consequences for the American and global economies.I would hope that there is enough bipartisan intelligence and understanding of the challenge that is ahead of the United States, but also the rest of the world, she said.Republicans have demanded that any plan to raise the debt limit be coupled with massive spending cuts to lighten the burden of government on the struggling economy. Higher taxes, Republicans have said from the start, are deal-killers if not offset elsewhere.But Obama has a long way to go to satisfy lawmakers in his own party, too. Many Democrats are unnerved by the presidents $4 trillion proposal because of its changes to Medicare and Medicaid.Despite Boehners preference for a smaller, $2 trillion plan for deficit reduction, White House aides said Sunday that Obama would press the lawmakers to accept the larger deal. Republicans object to its substantial tax increases and Democrats dislike its cuts to programs for seniors and the poor. The aides, however, left room for negotiations on a more modest approach.