20110707 obama congress deficit 54
U.S. President Barack Obama (3rd R) meets with congressional leaders including Senate Minority Leader Mitch McConnell (R-KY), Senate Majority Leader Harry Reid (D-NV) (2nd R), House Speaker John Boehner (R-OH) (C), House Minority Leader Nancy Pelosi (D-CA) (3rd L), House Majority Leader Eric Cantor (R-VA) (2nd L) and House Minority Whip Steny Hoyer (D-MD) in the Cabinet Room of the White House July 7, 2011 in Washington, D.C. - 

Tess Vigeland: Congressional leaders drove to the other end of Pennsylvania Avenue today for yet more budget talks at the White House with President Obama. They were meeting, of course, about a deal to cut the deficit and raise the debt ceiling. The president emerged from the meeting saying "the parties are still far apart." And he talked about the need for compromise on both sides of the aisle.

We asked Marketplace's Nancy Marshall Genzer to look at just how much that compromise might hurt.

Nancy Marshall Genzer: President Obama came out of the meeting talking about pain.

Barack Obama: Everybody acknowledged that there's going to pain involved politically.

Ouch. Like surgeons gathering around a sick patient, President Obama and the congressional leaders sat down to try to decide how to wield the knife. How about paring entitlements?

Jared Bernstein recently left his job as a top White House economist. He says Social Security was on the table today.

Jared Bernstein: So this is a big deal to a lot of people here, especially congressional Democrats who are very wary of any cuts on the entitlement side.

Because of that, Bernstein says the negotiators are only talking about trimming Social Security cost-of-living payments. That would hurt seniors, and those wary Democrats. Republicans appear to be softening his opposition to closing loopholes, although they're still opposed to any tax hikes.

Teddy Downey is a policy analyst at MF Global. He thinks both sides are inching closer to a deal, because they don't want the government to default.

Teddy Downey: Wall Street and economists are really going to start to lobby very aggressively as we get closer to the deadline that a deal needs to be reached.

But we won't really be close to a deal until congressional staffers start working nights and weekends, surrounded by empty pizza boxes.

Downey: Rhetoric and the public meetings and the frenzy in the media is not pushing the negotiations that much.

President Obama wants the hard bargaining to start soon. Those staffers better get some sleep while they can.

In Washington, I'm Nancy Marshall Genzer for Marketplace.