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Democrats, Republicans remain at impasse on debt ceiling

Republicans dug in their heels on the debt ceiling today, once again dismissing Democrats' attempts at raising revenue as tax increases.

Senate Minority Leader Mitch McConnell (R-KY), who met with President Obama yesterday and called it a "useful" meeting, said at a Senate stakeout he was "perplexed" by why the president "thinks tax increases ... would be a good idea in this economy."

Sen. Jon Kyl (R-AZ) added, once again, "We will not agree to raise taxes."

Kyl directly went after some of the specifics that Democrats have floated, like an inventory accounting provision called "Last In, First Out," or LIFO, saying they would all affect "small businesses."

He also claimed Democrats want to raise gas taxes, which he called "antithetical" to the release of some oil from the strategic oil reserve.

"It's bad for economic growth," he said, echoing McConnell. He added, the "last thing we want to do is saddle" businesses with "more taxes."

Democrats argue they do not want to raise taxes, but get rid of some tax deductions for the rich, close tax loopholes like for corporate jets, and cut some subsidies and Defense spending.

Suffice it to say, Democrats and Republicans remain at an impasse on the talks. They are about $1 trillion away from the $2 trillion to $2.5 trillion figure they want to get to in order to cover the government through the 2012 elections.

Since the talks led by Vice President Biden broke down last week, the two parties have engaged in a public-relations battle with familiar talking points -- Republicans argue that Democrats want to raise taxes on small businesses; Democrats argue that the GOP is simply looking out for the rich.

McConnell spokesman Don Stewart dismissed the issue of corporate jets, in particular, noting that will not close the gap.

"It's hundreds of billions in tax hikes," he said emphatically, repeating it over and over for the growing crowd of reporters in the hallways here. "You're not writing this down," he said lightheartedly imploring one reporter. "Is anyone Twittering this?"

Asked if he'd call it an "impasse," Stewart responded, "We'd call it, 'They insist on tax hikes. And that can't pass Congress.'"

President Obama is scheduled to meet tomorrow with Senate Democratic leaders at the White House. There is no meeting with McConnell or other Republicans slated yet.

Both Democratic and Republican leadership aides dismissed a rumor that debt ceiling deadline would be extended beyond Aug. 2. That's still the working date leadership of both parties is working with.