Negotiators Wrangle on Taxes

In Private Meeting, White House Pushes for Changes in Deductions, Subsidies

By NAFTALI BENDAVID And CAROL E. LEE
WSJ

With time running short to reach a deal to avoid a government default, President Barack Obama met privately Monday with Senate leaders in hopes of resolving an impasse over whether to include tax increases in a deficit-reduction agreement.

The White House argued that the deficit can't be significantly cut without eliminating tax breaks for certain wealthy individuals and companies, while Republicans said doing so would cripple the economy.

"Democrats and Republicans don't have to look hard to find common ground—we only have to be willing to admit it when we see it," Senate Majority Leader Harry Reid said after his meeting with the president.

But Senate Minority Leader Mitch McConnell (R., Ky.), before meeting privately with Mr. Obama, said all Americans would recoil at the prospect of tax increases, especially during a weak recovery. "Not only are they counterproductive from the standpoint of an economic recovery, they're also politically impossible," he told the Senate.

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