Obama: Nothing Off-Limits in Budget Debate Except tax hikes, retorts GOP By Polly Davis Doig, Newser Staff Posted Jul 2, 2011 9:08 AM CDT 79 comments Comments President Barack Obama waves as he leaves the White House in Washington, Friday, July 1, 2011, for Camp David, Md. (AP Photo/Manuel Balce Ceneta) (Newser) – Everything is on the chopping block as Democrats and Republicans wage their battle over the budget, according to President Obama: "Nothing can be off-limits," he said in his weekly address. Which might be news to Republicans, reports the AP, who are dug in on their stance that tax increases are most definitely off-limits. The Republicans swiped back in their response, with Sen. Dan Coats chiding Democrats that "their game plan is not working" and calling on them to "acknowledge that more government and higher taxes is not the answer to our problem." The rhetoric signals how entrenched into their respective positions both sides are, leaving the possibility of compromise in question. But Obama voiced optimism, saying, "I'm confident that the Democrats and Republicans in Congress can find a way to give some ground, make some hard choices, and put their shoulders to wheel to get this done." Congress resumes negotiations Tuesday.