Reported by Sam Stein for The Huffington Post

WASHINGTON — Sunday night’s much anticipated debt ceiling meeting between the president and congressional leadership managed to produce an outcome, just not the desirable one. Attendees did not find agreement on a package of cuts, revenues, or entitlement reforms. Instead, they settled on the decision to meet again and, perhaps after Monday’s meeting, again after that.

As the government approaches the August 2 date at which it will run out of cash, the need to hold meetings is the only thing both sides can agree on.

Sunday night proved no different, as lawmakers met in the Cabinet Room with no apparent budging from either end. According to multiple attendees, the discussion began with President Obama pressing, once more, for lawmakers to consider a “grand” bargain to end the debt ceiling debate, something that would combine $1 trillion in revenue raisers with $3 trillion in cuts, including reforms to Medicare and Medicaid and smaller tinkers to Social Security.

“The basic thrust of the meeting was the president making the case for why to do a big deal and putting it to everyone around the table: if not now, when? And if not the big deal, then what is the alternative, particularly given that it is the Republicans who have said we need to use this opportunity to do something serious about the deficit,” said a Democratic official briefed on the meeting. “The president is a bit frustrated too … He is out there. He is ready and willing to take political heat. He is already taking some heat.”

Less than 24 hours earlier, House Speaker John Boehner (R-Ohio) had formally rejected the very offer that Obama was pressing for, insinuating that it was too heavy a political lift and that negotiators would be better served building on the $2.4 trillion deal that Vice President Joseph Biden had been crafting in a series of bipartisan meetings with congressional leaders. Obama’s pitch did little to chip away at that opposition. The speaker, according to several sources briefed on Sunday’s meeting, did not say much during it, deferring instead to House Majority Leader Eric Cantor (R-Va.). But a Boehner aide made it clear after the fact that his boss hadn’t exactly been won over.

“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,” said the aide. “The speaker restated the fundamental principles that must be met for any increase in the debt limit: spending cuts and reforms that are greater than the amount of the increase, restraints on future spending, and no tax hikes.”

And so it went for roughly 75 minutes, as the eight congressional attendees, along with the president and vice president, spoke at varying lengths about not just the economic logic of their respective plans but the political arithmetic behind them.

Cantor and Senator Jon Kyl (R-Ariz.), the Senate minority whip, both insisted that a grand bargain did not have the votes needed to pass. “We should start talking about the Biden-type framework instead,” they added, according to a GOP source briefed on the meeting.

Biden, for his part, reminded the Republican attendees that the package they were now touting was one they had previously abandoned (both Cantor and Kyl walked away from the negotiating table when the talks turned to revenues). Besides that, he argued, it wasn’t really a package at all, but rather a list of goals with blanks requiring filling.

“The one really important point Biden made is that it is a bit of a fallacy to talk about the Biden framework as something that could just be taken off the shelf, because nothing was agreed to in those conversations and the vice president made it very clear that we weren’t going to [reach a deal] without revenues,” said the Democratic official briefed on the meeting.

If lawmakers wanted to go even smaller — say, take the $1 trillion in cuts that Biden and Republicans had pinpointed – they would have to convince the president first. Obama, according to a GOP aide, told attendees on Sunday that he would not sign a debt deal that didn’t go through 2013. He and Biden also made it clear that even the smaller packages would have to have a revenue component to earn their support.

For all the intractability, there were relatively few moments of tension on Sunday evening. According to those briefed on the exchanges, lawmakers took turns talking about their preferred approaches. There were some jabs thrown. Senate Majority Leader Harry Reid (D-Nev.), according to a Hill aide, accused the Republican Party of falling far short of their rhetorical bluster when the topic came to deficit reduction. He pointed to the fiscal commission, the Gang of Six negotiations, the Biden deal and Boehner’s refusal to craft a grand compromise with Obama as instances in which Republicans simply left the table when it came time to make tough choices. “Every time we try to do something big on this, you walk away,” the aide paraphrased him as saying.

By and large, however, the conversation was, as one Democratic official acknowledged, “cordial.” And that may be where the problem lies. With ten days to go before the president wants a bill presented — so that it can go through the legislative process in time to pass by August 2 — the sides are still dealing in broad strokes. Additionally, there isn’t a clear sense of what type of package could garner the necessary support. The president will be hosting a news conference on Monday before he meets with congressional negotiators once more. He left the meeting on Sunday telling them to have their schedules cleared or flexible for the full week.

“The president ended the meeting by saying we will come back here tomorrow and that we should be prepared to be here every day,” recalled the Democratic official briefed on the meeting. “He said, I want people to come back here tomorrow with an answer to the question: If not this, what is your plan and how are you going to get 218 votes [in the House] for it?”

By KEN THOMAS 06/26/11 07:18 AM ET AP

 

COLUMBUS, Ohio — Vice President Joe Biden said Saturday the Obama administration wouldn’t let middle class Americans “carry the whole burden” to break a deadlock over the national debt limit, warning that the Republican approach would only benefit the wealthy.

Addressing Ohio Democrats, Biden said there had been great progress in talks with Republican lawmakers on a deficit-reduction plan agreement. But he insisted that his party wouldn’t agree to cuts that would undermine the elderly and middle-class workers.

“We’re not going to let the middle class carry the whole burden. We will sacrifice. But they must be in on the deal,” Biden said in a speech at the Ohio Democratic Party’s annual dinner.

Biden led efforts on a deficit-reduction plan but Republicans pulled out of the discussions last week, prompting President Barack Obama to take control of the talks.

The sides disagree over taxes. Democrats say a deficit-reduction agreement must include tax increases or eliminate tax breaks for big companies and wealthy individuals. Republicans want huge cuts in government spending and insist on no tax increases.

On tax breaks for the wealthy, Biden used the example of hedge fund managers who “play with other people’s money.”

“And they get taxed,” Biden said. “I’m not saying they don’t do good things, they do some good things. But they get taxed at 15 percent because they call it capital gains. Because they’re investing not their money, (but) other people’s money.”

To ask senior citizens receiving Medicare to pay more in taxes when people earning more than $1 million a year receive a substantial tax cut “borders on immoral,” the vice president said.

“We’re never going to get this done, we’re never going to solve our debt problem if we ask only those who are struggling in this economy to bear the burden and let the most fortunate among us off the hook,” Biden said.

Republican leaders say without a deal cutting long-term deficits, they will not vote to increase the nation’s borrowing – which will exceed its $14.3 trillion limit on Aug. 2. The Obama administration has warned that if Congress fails to raise the debt ceiling, it would lead to the first U.S. financial default in history and roil financial markets around the globe.

Obama and Biden are scheduled to meet with Senate Majority Leader Harry Reid, D-Nev., and Senate Republican leader Mitch McConnell of Kentucky on Monday. McConnell and House Speaker John Boehner, R-Ohio, say no agreement can include tax increases.

Biden assailed moves by GOP governors in Wisconsin and Ohio to strip away collective bargaining rights from most public workers while criticizing efforts by Republicans in Congress to alter the Medicare program. He defended Obama’s handling of the economy, pointing to difficult decisions on an economic stimulus package and the rescue of U.S. automakers.

Ahead of Biden’s visit, Republicans countered that Obama’s policies led to GOP gains in 2010 and have failed to revitalize the economy.

“All the visits in the world from President Obama, Vice President Biden and other top-level surrogates won’t change the administration’s job-killing policies,” said Republican National Committee spokesman Ryan Tronovitch.

Biden, who spoke frequently of his blue-collar roots in Scranton, Pa., during the 2008 presidential race, is expected to be a frequent visitor to the Midwest during next year’s campaign.

Obama won states such as Ohio, Michigan and Pennsylvania in 2008. But those states elected Republican governors in 2010 and are considered prime targets for Republicans next year.

Looking ahead to 2012, Biden called Ohio “the state that we must win and will win.”

Written by Tyler Kingkade from Huffington Post

WASHINGTON — House Majority Leader Eric Cantor praised Vice President Joe Biden Monday for his handling of the debt limit talks, a positive sign for those who hope the government will raise its debt limit before financial markets react negatively to the growing potential of a U.S. default.

“I’ve been very impressed with the way he conducts his meetings — he does like to talk,” Rep. Cantor (R-Va.) said in a meeting with reporters. “I guess we all do, otherwise we wouldn’t be here.”

Discussions between Biden, Cantor and other congressional leaders about legislation to increase in the debt ceiling are expected to intensify this week as both the U.S. Treasury’s Aug. 2 default deadline and Congress’ summer recess grow nearer. Three debt talks are planned for this week.

“He has conducted these meetings in a way that has kept the ball rolling, and we are — I believe — beginning to see the essence of convergence on savings beginning to happen,” Cantor said. “Now, a lot of this will be up to where the speaker and the president end up.”

“The role that I play in these discussions,” the minority leader added, is to “define the playing field and to push as far as we can to come together to maximize savings and increase the amount of reform.”

Both sides have already agreed to over a trillion dollars in cuts, Cantor said. For the GOP’s cooperation in the debt ceiling vote, his Party is pushing for spending cuts in excess the $2 trillion it would be raised by.

Cantor said everything is on the table, but not tax increases.

This place does not have a revenue problem, it has a spending problem,” he said, insisting even considering them would be a disincentive to small businesses. “I don’t know whether it’s good, bad, indifferent — it just is what it is.”

Cantor reiterated his caucus’ belief that corporate tax rates ought to be lowered to make the U.S. more competitive, even though the current tax rate is at a historic low as a percentage of the country’s GDP.

Cantor predicted, if Congress simply “checked the box” and raised the debt ceiling without significant cuts accompanying the vote, interest rates would skyrocket and the federal government would be forced to raise taxes.

“No one wants that,” he said. “We’re not going to going along with that outcome.”

No clues were given about where the cuts were going to come from in legislation to raise the debt limit, but Cantor said the focus is on the initial 10-year budget window.

The majority leader declined to provide a target date to have the debt ceiling increase bill written, other than saying he did not want it to get the point where a negative reaction from the stock market forces Congress to raise it.

Treasury Secretary Timothy Geithner wrote to Congress in May, warning that the country is projected to begin defaulting on debts come Aug. 2, 2011. However, Geithner said that is no reason to wait to vote to increase the debt limit.

“While this updated estimate in theory gives Congress additional time to complete work on increasing the debt limit, I caution strongly against delaying action,” Geithner wrote. “The economy is still in the early stages of recovery, and financial markets here and around the world are watching the United States closely. Delaying action risks a loss of confidence and accompanying negative economic effects.”

The bipartisan Simpson-Bowles fiscal commission previously recommending various tax increases and reforms that Republicans are now opposing. Senior economic advisers to Ronald Reagan have also said tax increases will be needed in some sort to reduce the national debt.

Bruce Bartlett, who was a policy adviser in the Bush Treasury, told The Huffington Post recently that a trillion dollars has been “left on the table” due to the historically low tax levels. Another senior Republican economic adviser, Joel Slemrod, also said a return to Clinton-era tax rates would not necessarily harm the economy, although under current conditions it could be risky.

The original request to raise the debt limit by $2.4 trillion would be projected to last until the end of 2012, past the next elections. An ABC News/Washington Post poll found last week that a slim majority of Americans favor an increase, so long as it’s accompanied by spending cuts.