For both parties, deficit ceiling talks reveal fault lines

As the Aug. 2 deadline for raising the debt ceiling approaches, the high-stakes political discussions are exposing political fault lines within each party, and particularly among Republicans.

The White House says a basic agreement needs to be reached by July 22 in order to get legislation drafted and passed before the government reaches its $14.3 trillion debt ceiling. Negotiations at the White House Thursday between congressional leaders and President Obama were slated to discuss how to cut spending on Medicare and Medicaid and how to boost government revenue.

At Thursday’s White House briefing, Press Secretary Jay Carney said “there is potential here for a significant achievement."

Throughout the week, several divisions within Republican ranks have become more pronounced, providing a more complex view of the party's interests than the well-known tea party-influenced hard line. Business leaders who are the traditional allies of Republicans have warned of the potential economic calamity of not raising the debt ceiling, while Senate minority leader Mitch McConnell suggested that intransigence on the issue could "destroy" the GOP brand.

This comes as some Democrats push back against Mr. Obama's willingness to negotiate on reforms to Medicare and Social Security.

With Republicans so far refusing even to consider any tax increases, however, the focus remains largely on them. They vow to support an increase to the debt ceiling only if it is counterbalanced by equally large deficit reductions, and their unwillingness to consider tax increases as part of a deal has led to an impasse.

A newly vocal business community was one sign of division. In a letter from several hundred corporate executives sent earlier this week, the business community weighed in on getting the debt ceiling raised.

“Failure to raise the debt ceiling would strike an immediate and serious blow to any economic recovery, and failure to make significant progress on long-term debt reduction will continue the uncertainty which is hampering our investment climate,” Business Roundtable President John Engler said in the document. Mr. Engler is the former Republican governor of Michigan.

Other executives added to the sense of urgency. “No one can tell me with certainty that a US default wouldn’t cause catastrophe and wouldn’t severely damage the US or global economy,” Jamie Dimon, CEO of JPMorgan Chase, said Thursday. He added that,” it would be irresponsible to take that chance.”

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