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Obama Warns Cantor As Debt Talks Stall: 'Don't Call My Bluff'

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WASHINGTON -- Lawmakers and the White House had what nearly every party is describing as a "tough" and "testy" meeting on the debt ceiling Wednesday afternoon, culminating in a stormy exchange between President Barack Obama and House Majority Leader Eric Cantor (R-Va.).

It was the fifth straight day of talks, but the first in which attendees, speaking on background, were willing to admit that steps were taken backwards. According to multiple sources, disagreements surfaced early, in the middle and at the end of the nearly two-hour talks. At issue was Cantor's repeated push to do a short-term resolution and Obama's insistence that he would not accept one.

"Eric, don't call my bluff. I'm going to the American people on this," the president said, according to both Cantor and another attendee. "This process is confirming what the American people think is the worst about Washington: that everyone is more interested in posturing, political positioning, and protecting their base, than in resolving real problems."

Cantor, speaking to reporters after the meeting, said that the president "abruptly" walked off after offering his scolding.

"I know why he lost his temper. He's frustrated. We're all frustrated," the Virginia Republican said.

Democratic officials had a different interpretation. "The meeting ended with Cantor being dressed down while sitting in silence," one official said in an email. "[The president] said Cantor could not have it both ways of insisting on dollar-for-dollar and still not being open to revenues."

Lost in the rush to frame the dramatic conclusion of Wednesday meetings was word of the actual substance of the talks. According to several attendees, negotiations stalled from the onset over the same issues that have proved irresolvable. Working off of talks that had been spearheaded by Vice President Joseph Biden, the president said he would be comfortable signing off on northward of $1.5 trillion in discretionary spending and mandatory spending cuts. With additional negotiations, he added, he could move that figure up to $1.7 trillion, and with a willingness to consider revenue increases and tax loophole closures, lawmakers could get to over $2 trillion. His preference, he said, was to continue to push for the biggest package possible, so long as it was balanced.

Cantor, who has taken over the mantle of chief Republican negotiator from Speaker John Boehner (R-Ohio), responded by insisting that revenues were off the table and that without steeper cuts, the votes likely didn't exist to pass anything but a smaller, more temporary package. House Republicans needed the administration to go to a higher number, he added.

The president reportedly responded: "It is easy to get to a higher number when you are not asking anything difficult from yourself."

From there, the friction continued. When the White House pushed for an extension of unemployment insurance as part of the final package, Republicans objected. The White House was forced to explain that it would be offsetting that extension with cuts elsewhere. When the president pushed to lock in savings from cuts to the Department of Defense, Republicans objected again; this time, they were joined by Sen. Dick Durbin (D-Ill.), who urged (conversely) for the president to go further in pulling savings out of the Pentagon.

According to a Democratic official, the most contentious debate came when talks turned to discretionary spending, and, specifically, whether to count longterm savings based on current spending baselines or by tying them to inflation. Republicans wanted the former. It was, the official said, a debate over the "measurements of savings as opposed to the savings themselves."

From there, the conversation moved to how to enforce those savings in the long run. Those discussions, which took place between Sen. Jon Kyl (R-Ariz.) and top economic adviser Gene Sperling, were described as cordial compared to the earlier ones. But lawmakers quickly found themselves back on the same sticking point.

Unhappy that negotiators remained at approximately $1.7 trillion in cuts, Cantor pressed again for a shorter deal or for negotiators to find their way to $2.5 trillion. The president, growing more agitated, argued that attendees were simply looking for ways to say no.

"Talk about arbitrary," he said of Cantor's figure, according to a Democratic attendee. "I am totally willing to do the hard stuff to get well above what you need and you won't do it because you can't put one penny of revenue on the table."

"At least Mitch McConnell, to his credit, was willing to work for a solution," the president added, acknowledging the proposal by the Senate Minority Leader to, essentially, give him the authority to lift the debt ceiling without passing commensurate cuts.

"I have reached the point where I say enough," Obama concluded, according to Reuters. "Would Ronald Reagan be sitting here? I've reached my limit. This may bring my presidency down, but I will not yield on this."

Before Obama left the meeting, he gave lawmakers a directive. By Friday, the president said, the people in the room needed to have figured out what path they were going to pursue so that they could start hammering out the details.

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