A divided Congress seeks common ground on shrinking the deficit
Congressional leaders and administration officials met behind closed doors Tuesday to scour for common ground despite their sharply conflicting views on deficit-cutting strategies.
As the summer deadline nears to increase the amount of money the federal government can borrow, Democrats and Republicans remain bitterly split over how to address $1.5 trillion in annual deficits. In particular, they disagree about a GOP plan to privatize Medicare for the next generation of seniors.
The two sides may be able to find common solutions on spending, healthcare and tax issues, but neither Vice President Joe Biden nor congressional leaders would specify areas of potential agreement after Tuesday’s meeting, the second such gathering. The group agreed to meet again Thursday.
“We agree on a lot,” Biden said as he emerged from the meeting at Blair House, near the White House.
Sen. Max Baucus (D-Mont.) called the talks “substantive” and said the meeting went “better than the last one.”
On Monday, House Speaker John A. Boehner (R-Ohio) demanded trillions of dollars in spending cuts in exchange for GOP support for raising the nation’s $14.3-trillion debt limit.
The government will reach its borrowing limit next week, but administration officials say they can stave off a default on U.S. obligations until Aug 2.
By insisting on massive spending cuts, Boehner is setting a high bar — as the party’s conservatives are demanding.
The House Republican freshmen, almost all of whom voted for the Medicare overhaul, insisted Tuesday that President Obama seriously consider the privatization proposal.
“Inaction will mean Medicare becomes bankrupt and the reality that our generation may be the first in American history to leave the next worse off,” Rep. Adam Kinzinger (R-Ill.) wrote the president Tuesday in a letter signed by 41 other GOP freshmen.
Obama last month offered a plan that would cut $2 trillion in spending over 12 years while raising $1 trillion in new revenue.
Democrats have focused on Senate legislation to close tax loopholes for oil companies, a proposal popular among voters as gasoline prices have soared beyond $4 a gallon.
Oil and gas company executives are scheduled to testify about record profits and tax breaks at a Senate committee hearing on Thursday.
Democrats also want a speedier conclusion to the debt ceiling debate, as financial markets watch Washington for signs that it intends to honor its obligations.
A core difference between the parties is tax policy. Democrats insist that spending cuts alone cannot solve the nation’s deficit problems. They say the federal government loses $1 trillion annually through corporate and individual tax loopholes, some of which Obama wants to close. He has also called for ending George W. Bush-era tax cuts for families making more than $250,000 a year.
Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that although spending cuts are on the table, any agreement should also “make the tax code a little more fair.”
But for many lawmakers and their supporters, compromise is a dirty word.
The No. 2 Republican in the House, Rep. Eric Cantor of Virginia, traveled to New York this week to meet with Wall Street leaders.
Cantor, who rang the New York Stock Exchange opening bell Tuesday, said those he talked with urged him to “hold the line on spending” and avoid a compromise.
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