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Boehner seeks $2T deficit-reduction deal

WASHINGTON -- House Speaker John Boehner has informed President Barack Obama that he wants to pursue a smaller, $2 trillion deficit reduction deal, not the larger effort sought by the White House.

Boehner said the White House wanted to include tax increases in a deficit reduction deal of as much as $4 trillion over 10 years.

Republicans have been adamant that they would not support higher taxes. Instead, Boehner (R-Ohio) said Saturday that negotiators should focus on deficit reductions identified by a bipartisan group led by Vice President Joe Biden.

Meanwhile, Obama faces a dilemma that will stay with him even if he succeeds in striking a grand deal with Congress to cut the national debt: convincing Americans that the entire effort will do anything to create desperately needed jobs.

Obama ties deficit reduction to jobs, on the basis that trying to balance the nation's books will promote economic stability and give businesses more confidence to hire. But that's a tough sell to the millions of Americans out of work right now. And the communications problem just got harder.

The latest snapshot of the economy, issued Friday, was a body blow that showed employers added a meager 18,000 jobs in June. The leaders of the country, meanwhile, are consumed with negotiating a major debt-reduction deal built on cutting spending and raising taxes. It is not directly aimed at boosting jobs.

Obama's challenge is to link all this in meaningful terms and to get faster results. At stake are the country's economic recovery and his re-election chances.

The debt is the urgent problem for Obama and a divided Congress because they have no choice. Reaching a deal has become the key to winning GOP support for raising the nation's debt limit, a politically noxious vote that Congress must take by Aug. 2 to keep the nation from risking default for the first time.

"There's no question that this is a complex, almost impenetrable issue," said David Axelrod, a longtime Obama adviser and now a senior strategist to the president's re-election campaign. "It's not just the issue of the potential default, but it's the larger issue of what he's trying to get at, the opportunity of trying to do something big about the deficits and the debt. . . . The process of dealing with them is painstaking."

Republicans, too, face the challenge of explaining and defending how cutting debt will create jobs in the short term. They won control of the House last year in large part because of voter anxiety about government spending and jobs. But it is the president who bears the largest burden.

Now under deadline pressure, Obama and congressional leaders of both parties were to hold a rare weekend negotiation Sunday on a debt-cutting package.

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