On Thursday morning, President Obama will meet in the White House with top Democratic and Republican lawmakers — four from the House and four from the Senate — to continue work on a massive debt-reduction deal.
The goal is to complete a long-term, multitrillion-dollar budget reduction package by about July 22. That would give Congress enough time to write the deal into legislation, pass it and get it to Obama for his signature before the federal government reaches its $14.3 trillion debt limit on Aug. 2.
The U.S. Treasury says that on that date, it no longer would have the borrowing authority to continue paying all of the government's bills. Republicans have balked at raising the debt ceiling unless Congress also slashes spending.
Economists say a government default on its debts would convulse financial markets.
Republican leaders have suggested that they would consider a short-term budget package to avoid default, but Obama has rejected that idea. "I don't think the American people sent us here to avoid tough problems," Obama told reporters at the White House.
Republicans repeatedly have said they would not increase tax revenues as part of a budget deal. But on Wednesday, House Majority Leader Eric Cantor (R-VA) suggested that House Republicans may be willing to eliminate particular tax breaks under certain conditions.
"If the president wants to talk loopholes, we'll be glad to talk loopholes," Cantor said, adding that closing any loopholes "should be coupled with offsetting tax cuts somewhere else."
Obama and Democratic lawmakers have been floating ideas to raise revenues by roughly $400 billion over the coming decade.
On Wednesday, White House spokesman Jay Carney said a compromise to reduce the national debt by more than $2 trillion over the next decade is possible but would involve both spending cuts and tax revenue increases.
"The president believes, we believe, that there are enough members of both parties in both houses who support the idea that a big deal has to be balanced," Carey aid.
In his July 2 weekly address, Obama reiterated some of his ideas for changing the tax code to raise revenues enough to avoid some cuts. "If we choose to keep those tax breaks for millionaires and billionaires, or for hedge fund managers and corporate jet owners, or for oil and gas companies pulling in huge profits without our help — then we'll have to make even deeper cuts somewhere else," he said.