Obama gears up for high-stakes debt talks

WASHINGTON — President Barack Obama meets Sunday with his top Republican foes in a high-stakes effort to forge a budget deal and stave off a potentially catastrophic US debt default in early August.Republicans are refusing to raise America's $14.29 trillion debt limit unless Obama agrees to curb the budget deficit, including cuts to government-funded programs to help the poor and the elderly.Democrats are agreeing to try and save some $4 trillion over the next decade as part of the deal but say the Republicans are not meeting them half way by allowing tax reforms to spread the burden off the middle-class.Economists warn that if the United States defaults on August 2, it could lose its ability to borrow, souring fraught financial relations with creditors like China and sending the already sour global economy into a tailspin.On Saturday's eve of the crucial White House meeting, Republican leader John Boehner warned he was abandoning efforts to reach a larger, comprehensive debt reduction deal.Instead Boehner said his party would scale back the discussions and "focus on producing a smaller measure" of cuts that would offset any limit in the US debt increase, to avert a default."Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes. I believe the best approach may be to focus on producing a smaller measure," the speaker added.Speaking just hours before the talks were set to being, both Treasury Secretary Timothy Geithner and Obama's chief of staff, William Daley, refused to even consider the possibility the US would actually default on its debt.They clung to the notion that a comprehensive deal could still be achieved, but offered few clues to how the impasse might be broken."It's going to require both sides to compromise," Geithner told NBC's "Meet the Press," adding that Obama was aiming for "the biggest deal possible."Daley, on ABC's "This Week," refused to countenance the idea of a smaller deal saying: "Everyone agrees that a

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