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Debt Talks Continue Monday as $4 Trillion Debt Plan Remains Deadlocked

  • Obama Debt Deadline

    July 10: President Barack Obama meets with congressional leadership in the Cabinet Room of the White House.AP

  • boehner_obama_070711.jpg

    House Speaker John Boehner listens as President Obama speaks during a meeting with congressional leadership on the debt July 7 in the Cabinet Room of the White House.AP

President Obama tells congressional leaders to come back to the White House Monday after negotiations on Sunday deadlocked over a $4 trillion plan that includes tax increases and changes to Medicare and Medicaid. 

The president and lawmakers met for over an hour Sunday at the White House. A source close to the discussions tells Fox News that the president continued to push for the $4 trillion plan, took a short-term idea off the table and also told congressional leaders to come back Monday with a view on what could pass both the House and Senate.

The president will hold a news conference Monday at 11 a.m. ET to discuss the status of the debt talks.

House Speaker John Boehner said during the meeting that he believes the package based on Vice President Biden's group would be the "most viable option at this time for moving forward." Boehner also said that there is "no path" for a bigger deal.

Instead, Boehner told the group that a smaller package of about $2 trillion to $2.4 trillion was more realistic.

Boehner told Biden that he won't drop his "dollar-to-dollar" ratio of cuts to debt ceiling increase. Furthermore, the president indicated he wouldn't sign a deal that didn't extend the debt limit until at least Jan. 1, 2013.

A senior congressional Democratic source tells Fox News that Democrats are still "on the same page" and would prefer to "see the big deal" that was pulled off the table Saturday night by Boehner.

The essence, according to the Democratic aide, is that Republicans are "refusing to take yes for an answer because of their ideological adherence on revenues."

In addition, there were discussions of Biden's framework and how they could work off of that toward a potential agreement.

A spokesman for Senate Republican Leader Mitch McConnell slammed the president on entitlement reform following the meeting.

"The members will meet again tomorrow, though it's disappointing that the president is unable to bring his own party around to the entitlement reform that he put on the table. And it's baffling that the president and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits," McConnell spokesman Don Stewart told Fox News.

Senate Majority Leader Harry Reid's spokesman says the GOP is trying to take the "easy way out."

"Senator Reid remains firmly committed to getting the most robust deal possible. He stressed the need for an approach that is balanced between spending and revenues, in terms of timing, specificity and dollars. Senator Reid believes the stakes are too high for Republicans to keep taking the easy way out, and he is committed to meeting every day until we forge a deal, however long that takes," spokesman Adam Jentleson said in a statement.

House Minority Leader Nancy Pelosi said in a statement that she still wants a "large, bipartisan agreement."

"We came into this weekend with the prospect that we could achieve a grand bargain. We are still hopeful for a large bipartisan agreement."

Before Sunday's meeting started, the president said a debt deal with Congress needs to be worked out in the next 10 days as the Aug. 2 deadline to raise the nation's debt ceiling looms.

As the meeting opened, Obama and the leaders sat around the table in Sunday casual dress. Asked whether the White House and Congress could "work it out in 10 days," Obama replied, "We need to."

Partisan tensions were flaring ahead of the critical summit, where aides say the president planned to make one last push for a major deficit-reduction deal amid doubts on both sides. 

The talks still happened despite a surprise announcement from Boehner that rattled the almost-optimistic mood surrounding the negotiations. 

The speaker, claiming the White House was pushing too hard for tax hikes while not pushing hard enough for entitlement reform, said Saturday evening that lawmakers should aim for a smaller deficit-reduction deal. Instead of the $4 trillion package officials were talking about just days ago, Boehner suggested negotiators aim for a deal that would be worth about half that over the next decade. 

McConnell, speaking on "Fox News Sunday," confirmed that a $4 trillion package is now off the table. 

"Everything they've told me and the speaker is that to get a big package would require big tax increases in the middle of the economic situation," McConnell told "Fox News Sunday." 

Earlier in the week, Democrats had been sparring with the White House over its perceived willingness to deal with the GOP on entitlement reform. But Boehner's statement on Sunday turned their focus back to hammering Republicans for their insistence on no tax hikes in the deficit talks. 

"All they want is to cut Medicare/Social Security and protect the rich," a senior Democratic congressional aide told Fox News. 

Rep. Xavier Becerra, D-Calif., said there must be "shared sacrifice" in any deal. 

"Everything has to be on the table. But pretty quickly, my Republican colleagues said, everything should be on the table except taxes. That doesn't seem fair," he told "Fox News Sunday." 

On the other side, Sen. Jim DeMint, R-S.C., accused Obama of "gaming Republicans." 

"It's hard to take him seriously here," he said on "Fox News Sunday." 

The partisan recriminations cast a pall over the talks Sunday evening. After a bipartisan meeting at the White House Thursday, officials were talking ambitiously about a grand bargain -- one which might cut spending, address all three major entitlements, achieve tax reform and make other monumental changes in exchange for a "yes" vote on raising the $14.3 trillion debt ceiling before an Aug. 2 deadline. 

The fact that Republicans -- those pushing hardest for spending cuts and entitlement reform -- were scaling back those goals Sunday signaled the negotiations were still in a tenuous place. 

White House Chief of Staff Bill Daley nevertheless said Obama will push for a big deal out of Sunday's meeting. 

"Everyone agrees that a number around $4 trillion is the number that will make a serious dent on our deficit," Daley said. "That's what he wants to see. ... This president's still committed to doing big things." 

Daley, speaking on ABC's "This Week," called Boehner's statement "unfortunate." 

Treasury Secretary Timothy Geithner reiterated Sunday that a failure to negotiate a package and raise the debt ceiling by Aug. 2 would have "catastrophic" consequences for the economy. 

However, he and other officials expressed confidence that no matter the course of negotiations, Congress will ultimately vote to lift the cap.

The Associated Press and Fox News' Chad Pergram contributed to this report.