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Trillion-dollar question in debt-ceiling talks: What can pass the House?

President Obama and the Senate appear to be on the same page in debt-ceiling talks. But House Republicans are so far holding firm on their no-new-taxes demands.

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Last week, Jay Powell of the Bipartisan Policy Center met with the GOP caucus, showing members charts outlining “chaotic” consequences if Congress fails to raise the debt limit by Aug. 2.

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The toughest issue blocking a deal on a debt-ceiling hike is taxes. Republicans are solidly opposed to raising taxes, and most Democrats oppose proposed cuts to entitlement programs without tax hikes, especially on the wealthiest Americans.

But Mr. Boehner on Thursday reaffirmed a commitment to tackle the debt limit without raising taxes. “It's not only important to avoid default, it's also important that we take a meaningful step toward real deficit reduction,” he said at his weekly press briefing.

“This means in addition to cutting and capping spending now, there should be real structural reforms to our entitlement programs, and there will be no tax increases,” he added.

Antitax crusader Grover Norquist, who heads Americans for Tax Reform, stunned lawmakers on both sides of the aisle when he was quoted in a Washington Post editorial on Thursday saying that letting the Bush tax cuts expire as scheduled in 2012 would not violate ATR’s pledge to oppose tax increases – a pledge that most House Republicans have taken.

“This is a development the significance of which should not be underestimated,” said Sen. Charles Schumer (D) of New York, responding to the editorial on the floor of the Senate on Thursday. “It is a recognition from Norquist that the House Republicans are increasingly isolated and have painted themselves into a corner.”

In a statement, Americans for Tax reform reaffirmed its antitax stance. “ATR has not altered either its policy positions or opposition to all tax increases whatsoever in any debt negotiations,” the statement read.

Asked about the controversy at his press briefing on Thursday, Boehner said: “I’ve never voted to increase taxes, and I don’t intend to.”

So while House Republicans are clearly softening on their opposition to raising the debt limit, raising taxes remains a nonstarter.

“The main concern Republicans have is that we have here is a spending problem, not a revenue problem,” says Michael Franc, who heads the Heritage Foundation’s outreach to members of Congress.

"Anything that is a traditional form of tax increase will be a nonstarter. That’s a theological difference between Republicans and Democrats,” he adds.

The Republican caucus meets Friday morning to discuss the status of talks and then is expected to be out of town until Monday.

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