Obama enters fray as debt showdown drags on

WASHINGTON - Efforts to work out a deal for cutting government spending while at the same time raising the debt limit move into a new phase with President Barack Obama meeting at the White House with Senate leaders.

Mr. Obama is set to meet Monday morning with the Democratic leader, Sen. Harry Reid, and then in the afternoon with the Republican leader, Sen. Mitch McConnell.

Talks between congressional leaders of the House and the Senate reached an impasse last week over the question of federal revenue. Senate Democrats, led by Majority Leader Harry Reid, D-Nev., want to raise revenue by closing loopholes and trimming tax breaks for big companies, reports CBS News White House correspondent Bill Plante.

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But Republicans, led by Kentucky Sen. Mitch McConnell say any tax increase is off the table.

"The whole business of raising taxes, regardless of how you go about it, is something that the Congress is not likely to do," he said on ABC's "This Week" Sunday. "We have a spending problem. We don't have a problem because we tax too little."

According to the Washington Post, Republicans may even be willing to consider cuts to defense spending, traditionally viewed as a sacred cow, if it meant no tax hikes.

Both sides expected it would eventually come to this - getting the president involved at the last minute to make a deal, reports Plante. That's what happened in April on budget negotiations to avoid a government shutdown. This time, it's the threat of a U.S. government default, which makes the markets and foreign governments very nervous.