Posted by: Schuyler R. Thorpe | August 4, 2011

Progress Scarce As Impasse Continues

(12 days to go.)

Progress scarce as debt limit impasse continues

WASHINGTON (AP) — Progress remains elusive as official Washington grapples day after day for a way out of a debt dilemma that has the government sliding toward a first-ever default on its financial obligations.

President Barack Obama met with House Speaker John Boehner, R-Ohio, at the White House for 90 minutes on Wednesday, but neither side would comment afterward.

The session came a day after the House passed legislation that would increase the government’s borrowing authority by $2.4 trillion but condition the release of the money on a litany of tea party demands, including a requirement that Congress adopt a proposed amendment to the Constitution requiring a balanced budget.

Debate on the House plan, dubbed “cut, cap and balance,” begins in earnest Thursday in the Senate. Democrats are expected to kill the measure — which they say would demand debilitating cuts to Medicare — in a vote on Saturday if not before.

Meanwhile, momentum on a separate bipartisan budget plan by the Senate’s “Gang of Six” seemed to ebb Wednesday as critics warned the measure contains larger tax increases than advertised and it became plain that the measure comes too late and is too controversial to advance quickly — particularly as a part of a debt limit package that already would be teetering on a knife’s edge.

Absent a breakthrough between Obama and Republicans, there is a hotly contested backup plan by Senate Minority Leader Mitch McConnell, R-Ky., that would give Obama broad new powers to obtain increases in the government’s borrowing unless blocked by veto-proof two-thirds margins in both the House and Senate.

Many conservative Republicans are in an uproar over the McConnell plan, and more than 70 House members signed a letter circulated by Rep. Jim Jordan, R-Ohio, promising to oppose the proposal.

In a shift, White House press secretary Jay Carney said Obama would back a short-term deal to prevent a disastrous financial default on Aug. 2 but only if a larger and still elusive deficit-cutting agreement was essentially in place.

Officially, the president continued to push for a big compromise that would cut the nation’s budget deficit and extend the government’s tapped-out borrowing power above the current $14.3 trillion cap. Obama had threatened to veto any stopgap expansion of the nation’s debt limit, at one point last week even challenging House Majority Leader Eric Cantor, R-Va., not to call his bluff about it.

On Wednesday, Carney said if a divided Congress and the White House can agree on a significant deal, Obama would accept a “very short-term extension” of the debt limit to let bigger legislation work its way through Congress.

Obama also is open to the McConnell plan, but it seems barely aloft due to fervent tea party opposition in the House. The hope appears to be that such an option will look a lot better to the House in a week or so, given the lack of other ideas.

What also is becoming clear is that time is running out.

The realistic deadline for agreement is this week, not next week, given the time needed to craft, debate, pass and work out possible differences in legislation between the House and Senate.

Senate Majority Leader Harry Reid, D-Nev., said Tuesday that the head of the Congressional Budget Office has told him it could take two weeks to come up with an official cost estimate for even a relatively modest package of spending cuts. That means lawmakers may end up voting on a measure without knowing for sure how much it would save.

Then there are the problems of moving the debt limit increase through the Senate, where the rules allow any single member to force delays.

Parliamentary experts say that if the Senate takes up the debt limit measure on Saturday, it could take more than a week, until Monday, Aug. 1, to pass the measure through that chamber, give the House time to consider it and make changes and then gain Senate approval one more time.

“It’s daunting, but it’s doable,” said Marty Paone, a parliamentary expert with three decades of Senate experience. “If you want to assume the worst, that’s how long it will take.”

Critics like House Budget Committee Chairman Paul Ryan, R-Wis., say the Gang of Six plan would increase taxes by $2 trillion over the next 10 years instead of the $1 trillion-plus claimed by proponents like Senate Budget Committee Chairman Kent Conrad, D-N.D. — a development likely to stunt momentum among Republicans.

The revenue increase is larger than advertised because the $1.2 trillion in new taxes comes on top of an underlying assumption used by Obama’s deficit commission — and incorporated by the Senate group in its plan — that the Bush-era income tax brackets for family income exceeding $250,000 would revert to the higher, Clinton administration levels.

The Gang of Six plan also earned poor reviews from liberals like Rep. Jerrold Nadler, D-N.Y., who said it would “balance the budget on the backs of the vulnerable.”

And Rep. Howard “Buck” McKeon, R-Calif., who is chairman of the House Armed Services Committee, blasted the plan in a missive to his panel members, saying it would cut the Pentagon much too deeply and would unfairly curb military health and retirement benefits.

The Gang of Six plan promises almost $4 trillion in deficit cuts, including an immediate 10-year, $500 billion down payment that would come as Congress sets caps on the agency budgets it passes each year.

It also requires an additional $500 billion in cost curbs on federal health care programs, cuts to federal employee pensions, curbs in the growth of military health care and retirement costs, and modest cuts to farm subsidies.

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