Deficit reduction talks face roadblocks

WASHINGTON — The White House seeks to jump-start budget talks today amid signs that bipartisan efforts to save trillions of dollars have stalled over the two toughest issues: taxes and entitlement programs.

Gang of Six leaders, Sens. Saxby Chambliss, left, and Mark Warner, right, hope to spur bipartisan action on deficit negotiations.

By Bob Brown, AP

Gang of Six leaders, Sens. Saxby Chambliss, left, and Mark Warner, right, hope to spur bipartisan action on deficit negotiations.

A new round of negotiations headed by Vice President Biden will begin at Blair House, across from the White House, even as Democrats and Republicans in the Senate struggle to nail down a plan that could have bipartisan appeal.

Those ongoing talks have the best chance of attracting the broad support that President Obama and House Republicans lack for their separate approaches. But the "Gang of Six" senators have not been able to agree on tax increases sought by Democrats or entitlement cuts favored by Republicans.

Enter Biden and six different Democratic and Republican lawmakers, all members of their respective party's leadership teams. The negotiations, proposed by Obama last month, are intended to bridge differences between the parties over spending cuts and tax increases.

"This is the beginning of an important process," White House press secretary Jay Carney said Wednesday. "This creates the potential for a bipartisan compromise on some of this, at least. We expect progress to be made."

How much progress is an open question. Both parties have agreed to seek about $4 trillion in deficit reduction over 10 to 12 years. Republicans led by House Budget Committee Chairman Paul Ryan of Wisconsin want major changes in Medicare and Medicaid. Obama and congressional Democrats favor a mix of lesser spending cuts and tax increases on upper-income Americans.

As the clock tickstoward a possible default in early August unless Congress raises the nation's $14.3 trillion debt ceiling, some lawmakers are reducing expectations. Ryan said Wednesday that any agreement likely will represent "a single or a double," not "a grand slam."

A senior administration official involved in the upcoming talks said they will focus initially on areas of common ground. That could mean more spending cuts of the type negotiated last month to avoid a government shutdown, as well as strict rules to lock in future reductions.

The official, who asked not to be named because the budget talks have yet to begin, called any package designed to slash the government's $1.4 trillion deficit a difficult vote for lawmakers.

Since Obama's fiscal commission in December recommended cutting spending and eliminating tax breaks as a way to trim nearly $4 trillion from the next decade's deficits, attention has focused on three other deficit-reduction plans:

•Ryan united most Republicans last month around his 10-year, $4.4 trillion plan. It includes a dramatic overhaul of Medicare starting a decade from now, when the government would provide only a set amount of money and seniors would pay the rest.

•Obama proposed a 12-year, $4 trillion plan later in the month. Far less specific than the Ryan document, it would require roughly $2 in spending cuts for every $1 in tax increases, achieved by eliminating tax breaks.

•The third plan has yet to emerge. The Senate Gang of Six, headed by Sens. Mark Warner, D-Va., and Saxby Chambliss, R-Ga., has met for months in hopes of producing a plan that can pass the Senate, where both parties possess veto power.

"The more proposals to consider, the better," says Rep. Chris Van Hollen, D-Md., one of the lawmakers who will join Biden at the negotiating table today. "At the end of the day, you've got to bridge the divide."

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