July 20th, 2011
08:00 PM ET

Obama continues debt talks with Democrats, then Republicans

Washington (CNN) - President Barack Obama held separate meetings Wednesday with top congressional Democrats and Republicans as part of ongoing talks on a measure that would raise the nation's debt ceiling by August 2 to avoid a government default.

With time running out to reach an agreement, the possibility of a comprehensive deficit-reduction deal sought by Obama appeared less likely, with the president and Congress instead being forced to focus on a more narrow goal of increasing the government borrowing limit in the next 13 days so it can pay its bills after August 2.

At his daily briefing, White House Press Secretary Jay Carney signaled to reporters that Obama would be willing to accept a short-term increase in the debt ceiling - which caps the amount of money the government can borrow - if it is tied to agreement by both parties on a broader deficit reduction deal sought by the president.

Obama previously rejected such a short-term increase in the debt ceiling, and Carney's remarks sought to bolster support for a compromise in the talks as the deadline for default nears.

"We believe a short-term extension absent an agreement to a larger deal is unacceptable," Carney said.

He later issued a statement on the matter that said Obama opposes a short-term extension of the debt limit, but "the only exception to that is in the event that both sides reach a deal on a long-term extension of the debt limit plus significant deficit reduction, and we needed a very short-term extension (like a few days) to allow a bit of extra time for a bill to work its way through the legislative process."

So far, the main sticking point in negotiations has been Republican refusal to accept increased tax revenue sought by Obama and Democrats as part of a deal. Spurred by conservatives elected with tea party backing, Republicans seek to shrink the size of government through spending cuts while either keeping tax revenues where they are now or reducing them through a reformed system.

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