Huffington Post, congressional leaders had agreed on nearly $800 billion in increased tax revenues, which is roughly the amount that would be gained by allowing the upper-end of the Bush era tax cuts to expire. The White House had also asked for an additional $400 billion in revenues on top of that, while Republicans were asking for much deeper cuts to Medicare. Obama offered to give up on the additional $400 billion in revenues of the Republicans would abandon their demands over deeper entitlements cuts, at which point Boehner walked out. As Obama characterized the move at a press conference afterward, "It is hard to understand why Speaker Boehner would walk away from this kind of deal," Obama said. "Can they say yes to anything?"
Republicans, having dismissed Obama's "grand plan" which included $4 trillion in cuts to government spending, now seem to be in a position of arguing for even smaller cuts than they originally requested to entitlement programs. In addition, the House Tea Party's "Cut, Cap, and Balance" plan effectively died in the Senate, which would have simply forced austerity cuts and a constitutional amendment; battle axe-style legislation for which Tea Party members are becoming famous. Republicans continue to vie for deeper cuts to government spending and caps on future spending, simultaneously characterizing the White House as protecting government's "spending addiction", and characterizing Obama as a liar by warning the American public that a default would be disastrous. In fact, some Tea Party Republicans, Michelle Bachmann most notably, reject the idea that the U.S. default will be disastrous for the U.S. or that there will even be a default on August 2nd. She accused Obama of holding America's credit "hostage", saying, "“we cannot go on scaring the American people…We need to be truthful.”
In a recent TIME article, The Fact Gap, Alex Altman described a contingent of House Republicans that seem to be sorely disconnected from the reality of this situation. An interview with Jay Powell on NPR, former Treasury Secretary to George H. W. Bush, said of the idea to pay interest to U.S. bond holders first, What you didn’t pay, which you weren’t able to pay, is a single dollar for defense, including active-duty military pay, including the whole Pentagon and all payments to creditors in the defense area. You couldn’t keep the Justice Department. We wouldn’t have $1 for the FBI, for the courts, for the prisons...however you move the chess pieces around here, you lose." The idea that the dangers of default are political manipulations to "scare" the American public into accepting more government spending is ridiculous. Furthermore, the idea that raising the debt ceiling is somehow raising national debt is misleading, though many Republicans have characterized it that way. Instead, raising the debt ceiling simply allows the government to borrow enough to pay the debts it has already incurred.
Sen Minority Leader Mitch McConnell has called for the talks to come out of the White House and into the House and Senate to be debated. This sounds reasonable enough, until one realizes that this would only further bog down and already contentious debate and likely drag it on even further at a time when immediacy is of the utmost importance. It seems, at this point, that Republican leadership is determined to bring the debate up to the 11th hour and force a decision that may not be the best answer to a huge national question.