WASHINGTON — Congressional leaders dug in Sunday for a lengthy battle over the nation’s solvency as lawmakers determine how much debt the Treasury can accumulate and whether to reform the expensive programs of Medicare and Medicaid.
After two weeks of sometimes tumultuous meetings with constituents at home, lawmakers return to the Capitol’s fiscal wars this week. They must consider whether to raise the federal debt ceiling beyond $14.3 trillion in exchange for still undefined budget-tightening reforms — a debate that is certain to linger well past the preliminary deadline of May 16. That delay has already prompted Treasury Secretary Timothy Geithner to use accounting moves that would allow the United States to continue to make payments without exceeding the debt ceiling. But he would run out of possibilities in early July.
Setting the stage for negotiations that could last well into the summer, Democrats and Republicans criticized one another Sunday over which reforms to attach to legislation extending the debt limit, with Democrats adamant that higher taxes on the wealthy and revoked tax privileges for oil companies be a part of a broad deficit-reduction package. Most Republicans refuse to consider higher taxes as part of any final deal and demand the focus be on slashing entitlement spending.
“A lot of people think this is sort of like the magic fairy dust of budgets, that we can just make a small amount of people pay some more taxes and it will fix all of our problems. Well, let’s keep our eye on the ball. The eye on the ball is spending. And the sooner we get this thing under control, the better off everybody is going to be,” House Budget Committee Chairman Paul Ryan, R-Wis., said on ABC News’ “This Week With Christiane Amanpour.”
“The idea that we should come up with a balanced deficit reduction plan is right. But what’s wrong is to say that if one side doesn’t get 100 percent of what it wants in terms of coming up with that plan that they will put the entire economy at risk,” Rep. Chris Van Hollen, D-Md., the top Democrat on the budget panel, countered on CNN’s “State of the Union.”
Neither the House nor the Senate is considering legislation this week that is considered serious, with each body taking up proposals that are designed to score political points. Instead, the most critical action is happening behind closed doors at both ends of Pennsylvania Avenue.
In a personal charm offensive, President Barack Obama is hosting a dinner party tonight with a bipartisan collection of congressional leaders and top lawmakers from House and Senate committees.
On Thursday, Vice President Joe Biden brings congressional leaders to Blair House discussions about how to reach a deal on the debt limit and then about an even longer-term issue regarding Medicare and Medicaid.
Looming large over these White House-led meetings is the bipartisan work of an ad hoc collection of six senators, three Democrats and three Republicans, who are trying to cinch their own agreement, which could come before week’s end. They are believed to be working off the report from the president’s fiscal commission, which called for slashing $4 trillion from projected deficits over the next decade through a combination of spending cuts and increased revenue through higher taxes.
