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As news broke late Wednesday that Moody’s Investors Service was mulling a downgrade of the U.S. government’s triple-A credit rating, Congressional leaders emerged from a “tense” White House meeting that ended abruptly after a heated exchange between President Barack Obama and House Majority Leader Eric Cantor (R-Va.).
Though Democrats and Republicans wrestled to spin the meeting’s terse finish, both sides acknowledged that the potential economic consequences of a credit rating downgrade have added pressure on the leaders to extend the nation’s borrowing capacity before the Aug. 2 default deadline.
This urgency apparently was relayed by Obama, who said near the end of the meeting that the group must set its course by Friday on a deficit reduction package to pair with a vote to raise the debt ceiling. Treasury Secretary Timothy Geithner has said that negotiators would need to come to an agreement by the end of next week in order to give Congress enough time to approve legislation in advance of the August deadline.
“We have to decide by Friday which direction we’re going. ... We all need to think about things we can do instead of things we can’t,” Obama said, according to Cantor, who talked to reporters upon returning to the Capitol after the meeting, which lasted nearly two hours.
According to multiple sources from both parties who are familiar with the talks, Cantor insisted throughout the meeting that lawmakers pursue a short-term deal, a move that has been publicly rejected multiple times by Obama. The president has said he will not sign into law any debt limit increase that does not extend through the 2012 elections.
Apparently it was Cantor’s third insistence on a short-term deal, according to a Democratic aide, that set the president off.
After what many characterized as a “constructive” session identifying common ground on discretionary cuts ranging from $1.4 trillion to $1.7 trillion, Obama was telling the leaders that they would meet again Thursday when Cantor reportedly interrupted to make his case yet again.
Cantor explained to reporters that he told Obama he would hold multiple votes on short-term debt limit increases to allow more time to negotiate a final deal. Democratic officials said this is when Obama “lit into” Cantor for 10 minutes while the No. 2 Republican in the House “sat there speechless.”
“He said he had sat here long enough. ‘No other president, Ronald Reagan wouldn’t sit here like this,’ and he’s reached the point that something’s got to give,” Cantor said of Obama’s final exchange. “So he said, ‘You’ve either got to compromise on your dollar-for-dollar insistence or you’ve got to compromise on the big deal.’ Which means raising taxes.