A second round of deficit reduction talks between the Obama administration and a bipartisan group from Congress ended Tuesday much like last week’s initial meeting, with participants expressing optimism but offering little evidence a compromise is forthcoming.
Meanwhile on Capitol Hill, party leaders retreated to their talking points on how best to lower the nation’s ballooning deficit, with Republicans refusing to raise taxes and Democrats pushing a mix of tax hikes and spending cuts.
Vice President Joseph R. Biden met with six members of Congress - four Democrats and two Republicans - Tuesday afternoon at the Blair House in Washington to discuss ways to cut the budget and to ensure the nation doesn’t exceed its current debt limit.
Mr. Biden said after the meeting the group made “real progress,” while Montana Democratic Sen. Max Baucus said the meeting was “better than the last one,” according to wire service reports.
But for the most part the participants - like after last Thursday’s meeting - were tight-lipped about what was said at the closed meeting.
Treasury Secretary Timothy F. Geithner, White House Budget Director Jacob Lew and National Economic Council Director Gene Sperling also were scheduled to attend.
The group is scheduled to meet again Thursday.
The federal government is creeping up dangerously close to its $14.294 trillion debt ceiling, the government’s legal limit on how much it can borrow to pay for its operations. Exceeding the limit could lead to the United States defaulting on its loans, a scenario that would damage the nation’s credit rating and could trigger another financial crisis, Mr. Geithner has warned.
The government is on course to breach its debt limit this month, although Mr. Geithner has said he can juggle accounts until Aug. 2.
House Speaker John A. Boehner, Ohio Republican, on Monday drew a hard line on how far his party was willing to go to raise the nation’s debt limit, saying that any increase should be accompanied by $2 trillion in budget cuts.
Senate Budget Committee Chairman Kent Conrad, meanwhile, has drafted a plan that calls for $4 trillion in spending cuts over 10 years, according to lawmakers and aides.
Senate Majority Leader Harry Reid, Nevada Democrat, on Tuesday said the Conrad plan calls for an even “50-50” split of spending cuts and tax increases to reduce the deficit.
“We’re looking at large amounts of money that we have to work toward saving,” Mr. Reid said. “But it can’t all be done by cutting domestic discretionary spending. It has to be a fair approach.”
President Obama last month suggested a plan to cut $4 trillion from the deficit using a mix of $3 in spending cuts for every $1 in tax increases.
Democrats on Tuesday also introduced legislation to end tax breaks to big oil companies as one way to help lower the deficit.