jenny
2011-07-24 17:21:04 UTC
Obama and the Democrats in the room — House Minority Leader Nancy Pelosi, House Minority Whip Steny Hoyer, Senate Majority Leader Harry Reid and Senate Majority Whip Dick Durbin – continued to push for a grand bargain that would achieve some $4.5 trillion in savings. They also insisted that entitlement reforms — changes to Medicare and Social Security — remain on the table. “We came into this weekend with the prospect that we could achieve a grand bargain,” Pelosi said in a statement. “We are still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.”
House Speaker John Boehner, who had pushed for a bigger deal when negotiators convened last Thursday, reversed course on Saturday night, announcing he would seek a smaller package of just over $2 trillion in cuts. In Sunday’s meeting, House Majority Leader Eric Cantor did most of the talking for the GOP, insisting that all revenue increases in any deal be offset by tax cuts. Also present at Sunday’s gathering were Senate Minority Leader Mitch McConnell and Senate Minority Whip Jon Kyl. “It’s baffling that the President and his party continue to insist on massive tax hikes in the middle of a jobs crisis while refusing to take significant action on spending reductions at a time of record deficits,” said Don Stewart, a McConnell spokesman. “Sen. McConnell believes we need to reduce Washington spending, reform and strengthen entitlement programs, and prevent the more than trillion dollars in tax hikes that Democrats want to add at a time of rising unemployment.”
Before the grand bargain broke down, Democrats had demanded that $1 trillion in revenue increases be coupled with $3.5 trillion in spending cuts. About $300 billion of that would have come from ending corporate tax breaks and another $700 billion would’ve come from letting some of the Bush tax cuts for the wealthiest Americans expire. Boehner had argued the Bush tax cuts, along with other issues, should be left to a comprehensive tax reform package that could be taken up immediately following the deficit reduction deal. Obama had insisted that the Republicans should have to share in the sacrifice for a larger deficit reduction package. And, indeed, on Sunday night, Democrats argued that any package would have to include some concessions from Republicans.
But Republicans say Democrats are not really backing entitlement reform. The GOP is seeking cuts to Medicare and Social Security benefits as part of the package – not just for policy reasons, but for political ones: Bipartisan entitlement cuts would soften the blow of the unpopular Paul Ryan budget, which sought to voucherize Medicare. Pelosi and House Democrats have been loath to give up what they perceive as an advantage at the polls next November and have lobbied the President to take such cuts off the table. “This package must do no harm to the middle class or to economic growth,” Pelosi said following Sunday’s meeting. “It must also protect Medicare and Social Security beneficiaries, and we continue to have serious concerns about shifting billions in Medicaid costs to the states.” McConnell responded, “It’s disappointing that the President is unable to bring his own party around to the entitlement reform that he put on the table.”
President Obama and congressional leaders will reconvene at the White House at 11 a.m. on Monday to review the compromises worked out by Vice President Joe Biden and his group over the last couple of months. “The Speaker told the group that he believes a package based on the work of the Biden group is the most viable option at this time for moving forward,” Boehner’s office said in a statement following the Sunday meeting. But time is short. Negotiators will likely have to strike a deal by Friday so that drafters can write a bill, and the Congressional Budget Office can score it, with enough time left for both chambers of Congress to pass it before Aug. 2, when the Treasury Department says the U.S. will begin to default on its credit obligations.