June 26 (Bloomberg) -- House Minority Leader Nancy Pelosi said any deal to cut the deficit and boost the federal debt ceiling has to include reductions in “tax subsidies” for U.S. companies.
Democratic President Barack Obama and Republican House Speaker John Boehner will need the support of Democrats to get an agreement through the House, Pelosi said. Such an agreement would have to include both spending cuts and an end to tax breaks for some industries such as oil.
“You can’t cut your way out of the deficit. You have to have revenue on the table,” California Democrat Pelosi said
Obama stepped into the negotiations to cut at least $1 trillion from the long-term deficit and raise the nation’s $14.3 trillion debt ceiling before Aug. 2, after discussions led by Vice President Joe Biden broke down last week when House Majority Leader Eric Cantor, a Virginia Republican, walked out on June 23 saying he wouldn’t discuss increases in revenue.
“The obstacle has come because Leader Cantor walked away from the table because he doesn’t want to deal with the special interest tax subsidies,” Pelosi said.
Obama summoned Senate leaders Democrat Harry Reid and Republican Mitch McConnell to the White House for separate meetings on June 27 aimed at breaking the impasse.
Treasury Secretary Timothy Geithner has said the statutory debt ceiling must be raised by Aug. 2 or the U.S. risks being unable to pay its debts.
Moody’s Investors Service this month said it will put the U.S. government’s Aaa credit rating under review for a downgrade unless there’s progress on increasing the limit by mid-July. Standard & Poor’s in April put the U.S. on notice that it risks losing its top credit rating unless policy makers agree on a plan by 2013 to reduce budget deficits and the national debt.
--With assistance from Heidi Przybyla and Julianna Goldman in Washington. Editors: Ann Hughey, Gregory Mott.
To contact the reporter on this story: Alison Fitzgerald in Washington at afitzgerald2@bloomberg.net;
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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