Significant disagreement remains in negotiations to roll back the nation’s debt, lawmakers said Friday, as the clock winds down toward an Aug. 2 deadline to raise the government’s borrowing limit and avoid default.
House Speaker John A. Boehner denied media reports that he and President Obama — who have been meeting in recent days to try to hammer out a compromise — were close to a deal.
“There was no agreement — publicly, privately, never an agreement — and frankly, not close to an agreement,” the Ohio Republican said during a morning news briefing at the Capitol. “So I would just suggest it’s going to be a hot weekend here in Washington, D.C.”
House Majority Leader Eric Cantor said House Republicans — who earlier this week passed their “Cap, Cut and Balance” budget bill that would significant cut government spending and raise the $14.29 trillion ceiling on federal debt – have done their part and shouldn’t be blamed for the impasse.
“We’ve done and continue to do the work of the American people in the House,” the Virginia Republican said. “What has the Senate done? When is [Senate Majority Leader] Harry Reid going to put forward his ideas?”
Mr. Reid, a Nevada Democrat, pressed both Mr. Boehner and the president to be careful in their negotiation — a move many interpret as a warning to Mr. Obama not to budge on the Democrats’ push to increase tax revenue as part of any final deal.
“I say to both the president and to the speaker: … Be very careful, show a lot of caution as this negotiation goes forward,” Mr. Reid said on the Senate floor Friday. “Any arrangement must be fair to all Americans — not just the wealthy.”
The president is pushing for a “grand bargain” that would include deficit reduction of about $4 trillion over 10 years, including more than $1 trillion in increased revenue from closing tax loopholes and other tax code changes.
But Republicans insist that any deal not include tax increase. And many in the party say closing corporate tax loopholes is nothing more than a tax increase that would have an adverse ripple effect on the economy and average Americans.
The Democratic-controlled Senate Friday morning rejected the House’s Cap, Cut and Balance Act — which called for a constitutional amendment to balance the federal budget — in a vote that fell strictly along party lines. Democrats said the measure would lead to cuts in entitlement programs for seniors, middle-income Americans and the nation’s most vulnerable.
But Sen. Mike Lee, Utah Republican, said the House plan was by far the best proposal available to raise the debt limit and chastised Democrats for not offering their own proposed solution.
“I’m ready to see what they come up with — they own this [debt problem] now,” he said. “They have put this country in a position where it’s running up against a deadline with no legislation written.”
Mr. Reid cancelled a scheduled weekend work session for the Senate, saying that because any debt-reduction legislation likely will include tax revenues — which by law must originate in the House — it was pointless to keep his chamber open.
Mr. Boehner and the White House have been extremely tight-lipped about their private discussions, with even party leaders — including Mr. Reid — saying they aren’t privy to the details.
Sen. Jeff Sessions of Alabama, the senior Republican on the Senate Budget Committee, said he is “uneasy” about how the negotiations have been conducted behind closed doors.
“It’s pretty dangerous,” Mr. Session said. “My concern is that it’ll probably be cobbled together by a few people, produced, and it may or may not be wise.”
Treasury Secretary Timothy F. Geithner has warned the debt ceiling must be raised by Aug. 2 or the federal government risks defaulting on its sovereign debt — a scenario he says could trigger a major economic crisis.
A bipartisan group of senators called the “Gang of Six,” who unveiled a debt-reduction proposal this week similar to Mr. Obama’s, was scheduled to meet Friday.
Senate Minority Leader Mitch McConnell also has proposed a “backup plan” that would increase the debt ceiling while getting more than $1 trillion in spending cuts, though that proposal is unpopular among House Republicans.
• Sean Lengell can be reached at slengell@washingtontimes.com.
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