Budget Standoff Continues On Capitol Hill

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Budget deficit talks that broke down last week are now in the hands of President Obama and top senators — but remain mired in intransigence. At least three budget items arguably need to be on the table: revenue increases, entitlements and defense spending — but it's unclear any of them is. Minority Leader Mitch McConnell has declared "no new tax hikes." Two senators are introducing a Medicare savings bill that won't fly with Democrats, who win points by running against Rep. Paul Ryan's plan to "end Medicare as we know it." And defense cuts — even if small ones are achieved — are dicey for all.


From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Melissa Block.

A high-stakes game of chicken is underway here in Washington. The White House has been warning for months that unless Congress raises the debt ceiling by August 2nd, the country risks a potentially catastrophic default. Congressional Republicans say the only way they'll go along is if they can cut budget deficits by as much as the debt ceiling is raised.

But as NPR's David Welna reports, there's now a political standoff over just how to do that.

DAVID WELNA: After the only Republicans involved in negotiating a deficit reduction deal walked out on talks last week, President Obama stepped in. He summoned the Senate's Democratic and Republican leaders to the White House for separate talks yesterday.

And today, White House spokesman Jay Carney assured reporters traveling on Air Force One that all was going well.

JAY CARNEY: We believe that there is the opportunity here for substantial compromise on a significant deficit reduction agreement that is done in a way that's balanced and allows for the economy to continue to grow and create jobs even as we get our fiscal house in order.

WELNA: But a decidedly less upbeat assessment came today from one of the two senators who met with the president: Republican leader Mitch McConnell.

MITCH MCCONNELL: The path forward seems to be blocked by an insistence on raising taxes in the middle of an economic slowdown.

WELNA: McConnell pointed out that some Democrats argued last December that ending the Bush tax cuts then could hurt the economy.

MCCONNELL: Most of us believe the economy is not in any better shape now than it was in December, and so far, they're saying that it's essential. We think it's a job-killing step that shouldn't be taken, and Republicans are not interested in going in that direction.

WELNA: Republicans, replied New York Democrat Charles Schumer, are clearly serious about politics, not deficits.

CHARLES SCHUMER: The person standing in the way right now is Senator McConnell. You haven't heard such strident language from the other leaders. When he says take everything we want and nothing you want, we will not get an agreement.

WELNA: There were further recriminations today from the other senator who met with President Obama, Majority Leader Harry Reid. Republicans, he said, don't care about the consequences for middle-class Americans of massive spending cuts.

HARRY REID: They care more about protecting their tax breaks for oil companies, companies that ship jobs overseas, even people who own corporate jets and yachts.

WELNA: In fact, some Republicans do seem willing to go after some tax breaks. Alabama Senator Jeff Sessions includes the one benefiting owners of corporate jets.

JEFF SESSIONS: You don't want to get in the position of trying to examine every tax expenditure a corporation has, but we could consider that. I'll be glad to look at it.

WELNA: One deficit-cutting proposal put forward today would raise the eligibility age for Medicare from 65 to 67. One of its sponsors is Connecticut independent Joe Lieberman.

JOE LIEBERMAN: Our plan contains some strong medicine, but that's what it will take to keep Medicare alive.

WELNA: But Democrats are as opposed to revamping Medicare as Republicans are to raising taxes, so the standoff continues five weeks away from August 2nd.

David Welna, NPR News, the Capitol.

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