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Mitch McConnell: Grand Bargain On Debt Limit Unlikely (VIDEO)

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WASHINGTON -- Hours before a major White House meeting over the debt ceiling negotiations, Senate Minority Leader Mitch McConnell (R-Ky.) said on Sunday a grand bargain over the deficit may be dead, with Republicans unwilling to accept revenue-raising measures in exchange for major spending cuts and entitlement reforms.

"We have 9.2 percent unemployment, and their response is to raise taxes? I mean, my goodness," McConnell told "Fox News Sunday." "I'm for the biggest deal possible too, but we're not going to raise taxes."

Talks over a deal to raise the debt ceiling are stalled, after House Speaker John Boehner (R-Ohio) announced on Saturday he would not accept a major package of cuts if it included revenue-raisers. With the Aug. 2 deadline for raising the debt ceiling rapidly approaching, Boehner has said Republicans and Democrats are still far from reaching a deal.

"I think it is [off the table], because everything they've told me and the speaker is that to get a big package would require big tax increases in the middle of an economic situation that's extraordinarily difficult, with 9.2 percent unemployment," McConnell said. "We think it's a terrible idea. It's a job killer."

Republicans had previously pushed for major spending cuts, including to entitlement programs such as Social Security and Medicare, as part of a debt-reduction deal. But with reports that Obama wants a "grand bargain" deal that combines these cuts with roughly $100 billion worth of tax increases per year over ten years, Republicans are backing off, reaffirming they will not agree to tax increases even if they receive major concessions in the form of spending cuts and entitlement reforms. Now, Republicans are pushing for a deal that includes the $2.4 trillion in cuts from the Biden talks before they fell apart last month.

Leaders from both chambers and parties will meet at the White House on Sunday evening to discuss a deal, which the president reportedly hopes will be a major deficit-reduction package.

McConnell said the latest jobs numbers, which came out on Friday, affirmed that taxes should not be raised -- despite the fact that economists have said that the only way to balance the budget is to combine tax increases with spending cuts.

"It ought to incentivize us to do a big package without increasing taxes," he said, adding that Democrats do not seem to agree.

Still, he did not shoot down the idea of making a deal now that reforms the tax code later, which Republicans have repeatedly said they are willing to do as long as savings go to lowering tax rates. Some Democratic sources have said that may be the approach taken in the final deal.

House Majority Whip Kevin McCarthy (R-Calif.) echoed McConnell's statements Sunday, saying Republicans will not agree to a "grand bargain" if it involves any revenue-raising measures.

"Boehner's been very clear that there are no votes for tax increases," he said on CNN's "State of the Union." "Why, if America could only create 18,000 jobs last month, would you raise taxes?"

McCarthy insisted that Democrats did not have the votes to raise taxes either, pointing out that the Bush tax cuts were extended under a Democrat-controlled House and Senate last December.

Rep. Chris Van Hollen (D-Md.), also appearing on "State of the Union," said Democrats are willing to reform taxes, including cutting rates for some, as part of a final deal. He said they would also be willing to raise the debt ceiling without preconditions, but that Democrats want to take the opportunity to begin to deal with the deficit.

"It's very disappointing that we lose this opportunity to do something significant in terms of deficit reduction because of this rider of ending special interest tax breaks," he said.

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