WASHINGTON (Reuters) - An effort to craft a broad deal of up to $4 trillion in deficit-reduction appeared out of reach on Saturday as Republican leader John Boehner cited differences with the White House on taxes and proposed pursuing a more modest package.
"Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," Boehner, the speaker of the House of Representatives and the top Republican in Congress, said in a statement.
"I believe the best approach may be to focus on producing a smaller measure."
Boehner and President Barack Obama spoke about the debt situation by phone on Saturday.
On the eve of a meeting between Obama, Boehner and other congressional leaders at the White House on Sunday, staff for both Republicans and Democrats have been working through the weekend.
They are trying to work out details of a package that would cut the U.S. budget deficit by $4 trillion over 10 years. Proposals involve slashing spending by reining in expenditure on the Social Security retirement system and Medicare, the government-run healthcare program for the elderly, as well as closing tax loopholes.
The negotiations are part of a deal that also would raise the U.S. debt ceiling before a deadline of August 2, which the Obama administration says is necessary to avoid a default.
Obama and Boehner had hoped to put together the outlines of an ambitious plan, but now will focus on a scaled-back attempt that would cut the deficit by about $2 trillion over a decade.
One Republican familiar with the discussions said both taxes and cuts in Social Security and Medicare were sticking points.
"The White House would not agree with the core elements of tax reform proposed by the speaker," the Republican source said. "A gulf also remains between the speaker and the White House on the issue of medium- and long-term structural reforms."
(Reporting and writing by Caren Bohan; Editing by Bill Trott and Chris Wilson)
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