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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As Obama Turns to Deficit Reduction, Supporters Ask Where Are the Jobs?

AP

Wednesday: President Obama speaks during a town hall meeting at Facebook headquarters in Palo Alto, Calif.

With the conversation in Washington shifting focus to paying down what the nation owes and having the government live within its means, the president's supporters say they don't want him to forget about job creation and the housing recovery.

At a town hall meeting Wednesday at Facebook headquarters in Palo Alto, Calif., an audience member asked the president how he planned to "balance these two going forward, or even potentially shift the conversation back."

Obama said that without getting the deficit down, spending on

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Budget Panel: Obama Deficit Plan Saves Less Than Advertised

AP

President Obama speaks during a town hall meeting at Facebook headquarters in Palo Alto, Calif., April 20.

A leading panel of budget experts estimated Thursday that President Obama's latest spending plan does not save as much money as the White House initially claimed and is about $1.5 trillion more expensive than the Republican plan. 

Since he delivered a major fiscal policy address last week, Obama and other officials have touted that the White House plan would cut $4 trillion over 12 years. Using that figure, they've claimed it's very similar to a House Republican plan which supposedly would cut $4.4 trillion over 10 years. 

But given that most budget outlines use a 10-year window, as required by law, the Committee for a Responsible Federal Budget tried to offer an apples-to-apples comparison -- and determined Obama's proposal would actually cut deficits by $2.5 trillion over the next decade. It credited the president for "moving the ball forward," but said that based on Congressional Budget Office assumptions, the plan doesn't do enough to tackle the debt crisis. 

"It appears unlikely that the policies proposed in the president's framework would be sufficient to reduce debt to a manageable level," they wrote. 

In response, the White House claimed that using the 10-year window, the president's budget plan would cut $2.9 trillion, not $2.5 trillion. And officials continued to stand by the claim that it cuts $4 trillion over 12 years. A White House aide suggested the president's plan would save more than the committee claims in part because of a "failsafe" provision that would trigger additional spending cuts if debt reduction goals are not met. 

"Even with the Committee for a Responsible Federal Budget's shifting of the goalposts and failure to factor the failsafe in their analysis, they still confirm that the president's plan would reduce the deficit substantially and prevent a large increase in the debt," White House spokeswoman Amy Brundage told Fox Business Network. 

The Committee for a Responsible Federal Budget also dialed back Republican claims about their spending plan. Though Rep. Paul Ryan, R-Wis., the plan's author, claimed it would cut $4.4 trillion over a decade, the committee said it would cut more like $4 trillion in that period. 

That still leaves $1.5 trillion separating the two plans, in an apples-to-apples comparison, raising questions about administration claims that Republicans and Democrats agree on how much to cut. 

The new estimates also showed the GOP plan would bring the debt down to about 69 percent of GDP by 2021. By contrast, Obama's plan would bring the debt to 77 percent of GDP, the report said. 

The committee is composed of former officials from the CBO, the White House Office of Management and Budget and other key offices.

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GOP Leaders Name Cantor, Kyl to Deficit Panel

Associated Press

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The No. 2 Republicans in the House and Senate have been named to a deficit panel led by Vice President Biden that is tasked with developing a bipartisan plan to curb federal budget deficits.

House Majority Leader Eric Cantor of Virginia and Senate Minority Whip Jon Kyl of Arizona join several Democratic stalwarts on the panel, which meets next month. President Barack Obama set up the panel last week.

It's the second such panel for Obama, who largely ignored the bipartisan but politically painful cuts and revenue increases the first panel came up with last year. The new group comes as must-pass legislation to maintain the government's ability to borrow comes to a head. Both Obama and Republicans say spending cuts must be part of that effort.

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Senators Boast New Deficit Reduction Plan Will 'Make Everybody Mad'

AP

Shown here are Sen. Tom Coburn, left, and Sen. Mark Warner.

Get ready for another deficit reduction plan. And this one, like the others on the table, will tick off a lot of people, its authors say. 

Two members of the so-called "gang of six" -- a bipartisan group of senators working to craft a long-term spending plan -- said Sunday they're making progress on their proposal, despite concerns expressed last week that the talks could be in trouble. 

And, in claiming the plan would take a balanced approach, they predicted Republicans and Democrats alike would despise it. 

"Let me assure you, we're going to make everybody mad," Sen. Mark Warner, D-Va., said. 

The work product is the latest in a string of cure-all budget plans meant to take the country off its course of seemingly endless debt accumulation. But the pressure is on, with partisan sparks flying over the plans already on the table. After Republican Rep. Paul Ryan outlined his budget proposal, Democrats said its prescribed overhauls to Medicare and Medicaid were cruel to seniors and the poor. After President Obama countered with a plan of his own, Republicans slammed him for turning to tax increases and suggested the rest of the document was fuzzy on details. 

Meanwhile, the comprehensive report from the fiscal commission created by the president more than a year ago died in committee. Underscoring the importance of the ongoing "gang of six" negotiations, fiscal commission co-chairman Alan Simpson said after Obama's budget speech Wednesday that people need to "pray for" the talks. 

Though Sen. Tom Coburn, R-Okla., who is part of the talks with Warner, said last week that the group was "not anywhere close" to an agreement, he said Sunday "there's a good chance that we'll be able to come up with a bipartisan agreement that people can swallow." 

That doesn't mean they'll be happy. 

"Nobody is going to like what we come up with," Coburn told "Fox News Sunday." "The left isn't going to like it and the right isn't going to like it. And that's one thing that would be an indicator that is probably the best compromise we're going to be able to get." 

Coburn said Americans need to know that lawmakers in Washington are "willing to lose elections to do what is best for the country." 

Coburn did not elaborate on the details of the plan, but Warner offered a few glimpses. 

In an interview with CBS' "Face the Nation," he said "everything has to be on the table." 

Warner said the group was working off the proposal from the president's fiscal commission and would be "touching every part of the problem," including Social Security -- something largely excluded from both Ryan's proposal and Obama's. 

"Part of this is just math -- 16 workers for every one retiree 50 years ago, three workers for every retiree now," Warner said. 

He also said the tax code needs to be addressed, not necessarily through tax increases but by eliminating deductions. He said the group is looking to impose about $3 in cuts for every $1 in increased revenue. 

"Charitable deduction, home mortgage deduction -- if we would cut back on some of those, we could actually lower rates and still increase revenues," he said. Warner said the group is "very close" to a deal. 

Anything that even resembles a tax increase, though, is anathema to many Republicans. 

Ryan, on "Face the Nation," reiterated that his party opposes the president's call to roll back the Bush tax cuts for top earners. He, like Warner, stressed the importance of targeting loopholes and deductions -- though Warner suggested Ryan's plan doesn't do enough to raise revenue. 

Tea Party-backed Sen. Rand Paul, R-Ky., also said tax increases are not the answer. Rather, he said the two parties could find middle ground by putting the Pentagon on the budget chopping block. 

"The compromise is not to raise taxes," Paul said on CNN's "State of the Union." "The compromise is for conservatives to admit that the military budget's going to have to be cut. ... The compromise is where we cut, not where we raise taxes." 

Treasury Secretary Tim Geithner said Sunday that despite the bickering, Republicans and Democrats do agree on something -- both sides are calling for about $4 trillion over the next decade or more. 

"We can agree on the broad targets," he said on NBC's "Meet the Press." 

Technically, Republicans are calling for $4.4 trillion in deficit reduction over 10 years, and Obama is calling for $4 trillion over 12 years. The Republican plan incorporates far more spending cuts than Obama's. But Geithner said the parties have the "same basic view" of the end goal. 

The "gang of six" is not expected to have a report until after the two-week spring recess that starts Monday. The other members on that panel are Sens. Dick Durbin, D-Ill.; Saxby Chambliss, R-Ga.; Kent Conrad, D-N.D.; and Michael Crapo, R-Idaho. Conrad threatened last week that if the group doesn't come up with something soon, he might propose his own budget plan.

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Obama: Deficit Control Plan 'Can't Exempt Anyone'

Associated Press

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WASHINGTON -- President Obama says the nation's effort to curb ballooning deficits "can't exempt anyone." 

Obama spoke Thursday as he met with the co-chairmen of his deficit reduction commission, a day after laying out his blueprint for erasing some $4 trillion in red ink over 12 years. 

The commission was led by former Republican Sen. Alan Simpson and Erskine Bowles, former White House chief of staff to Bill Clinton. It produced a plan for a similar amount of deficit reduction over 10 years. 

Obama tells reporters the country needs to ask everyone to participate in the effort to get its fiscal house in order.

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Obama calls for deficit cuts

By Pablo Martinez Monsivais, AP

President Obama outlines his fiscal policy during an address at George Washington University in Washington on Wednesday.

EnlargeCloseBy Pablo Martinez Monsivais, AP

President Obama outlines his fiscal policy during an address at George Washington University in Washington on Wednesday.

At the same time, Obama used a 43-minute address at George Washington University to deliver a scathing attack on Republican proposals for unprecedented cuts in Medicare and Medicaid and a vigorous defense of his vision for an activist government.

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Comparing deficit plans

s health care law.

STORY: Health care law gets day in courtSTORY: Obama calls for deficit cutsSTORY: Medicare at the center of budget debateSocial Security

•Obama: Calls for bipartisan efforts to address the retirement program without privatizing it or slashing benefits in the future..

•Fiscal Commission: Gradually increases retirement age to 68 by 2050 and 69 by 2075; raises the amount of income subject to Social Security taxes in 2020 from about $168,000 to $190,000.

•Bipartisan Policy Center: Raises the taxable income ceiling to $190,000; trims benefits for wealthier beneficiaries; indexes the benefit formula to pay early retirees less and older retirees more.

•House Republicans: Creates a process under which Congress would have to address the retirement program

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Obama to lay out his deficit strategy

Handicapping Obama's budget speechSTORY HIGHLIGHTSThe president enters tricky political territory with highly anticipated speechPresident Obama is responding to a Republican budget planThe speech comes amid a national debate on budget issues Washington (CNN) -- President Barack Obama enters politically tricky territory Wednesday when he outlines his plan for reducing long-term deficits and the national debt amid a climate of tense budget negotiations.

The speech at George Washington University will follow White House talks in the morning with congressional leaders who are staking out positions on upcoming issues including approval of last week's budget deal for the rest of the current fiscal year, increasing the federal debt ceiling and crafting a budget for fiscal year 2012.

For Obama, the speech is a response to a Republican budget plan for next fiscal year released last week by House Budget Committee Chairman Paul Ryan, R-Wisconsin, that would overhaul the Medicare and Medicaid government health care programs for the elderly while reforming the tax code to lower rates and eliminate loopholes.

The Ryan plan is strongly opposed by the White House and congressional Democrats, who say it protects the wealthy while putting the burden of spending cuts and other reforms on the middle class and the poor.

A White House official said Obama's speech would emphasize "shared prosperity and shared responsibility," advocating a balanced approach to control expanding deficits while protecting vital spending for education, innovation and clean energy.

According to the official, Obama will call for holding down domestic spending, cutting defense spending, reducing costs while strengthening Medicare and Medicaid, and tax reform.

"The president's proposal will build off of the deficit reduction measures included in his 2012 budget and will borrow from the recommendations of the bipartisan Fiscal Commission he created" last year, the White House official said.

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'Gang of Six' hopes to spur bipartisan action on deficit

By Bob Brown, AP

Senators Mark Warner, D-Va, left, and Saxby Chambliss, R-Ga, are urging action on the debt.

EnlargeCloseBy Bob Brown, AP

Senators Mark Warner, D-Va, left, and Saxby Chambliss, R-Ga, are urging action on the debt.

The "Gang of Six," as they are known, is close to offering a deficit-reduction plan more specific than what Obama plans to talk about this week. It would be the only bipartisan plan in Congress, written by liberal Democrats and conservative Republicans.

The gang leaders, Democratic Sen. Mark Warner of Virginia and Republican Sen. Saxby Chambliss of Georgia, outlined the need for major action Monday before the Rotary Club of Atlanta. Today, they'll be back in Washington for more private meetings.

"We hope this week to make the progress we need to close the deal," said Sen. Dick Durbin, D-Ill., the Senate's assistant majority leader. He said a plan from three Democrats and three Republicans "could be a game-changer" that "might set the stage for some broad agreement."

ROMNEY: Explores '12 presidential run GOP HOPEFULS: Line up endorsements from Congress As Congress prepares to vote this week on $38.5 billion in spending cuts for 2011 that averted a partial government shutdown over the weekend, plans for trillion-dollar savings are proliferating:

•An 18-member bipartisan commission called in December for nearly $4 trillion in spending cuts and tax increases over the next decade. It included four of the Senate gang's members — Durbin, Kent Conrad, D-N.D., Tom Coburn, R-Okla., and Mike Crapo, R-Idaho. The Bipartisan Policy Center think tank went further, calling for almost $6 trillion.

•Last week, Republicans who won control of the House in November produced an ambitious plan that they said would cut nearly $6 trillion in spending. The plan, written by House Budget Committee Chairman Paul Ryan of Wisconsin, calls for major cuts in Medicare and Medicaid, cuts taxes, and includes small reductions in defense spending.

•Obama's speech at George Washington University and the Gang of Six proposal soon thereafter will complete the picture, giving lawmakers a range of options for what would be the biggest deficit-slashing package in at least 14 years.

"Everybody's going to have some skin in the game," Warner said. "We don't need another commission. … We need to move forward."

The slide show he and Chambliss presented to the Rotarians Monday was intended to boost their case for action this year. Without action, they said, the national debt will be on a par with Greece by the end of the decade. Congress must vote to raise the government's debt ceiling by early July or risk an unprecedented default.

The Gang of Six approach is based on Obama's commission, which called for a mix of spending cuts and tax increases. Obama never endorsed the plan, and his proposed 2012 budget called for only $1.1 trillion in deficit reduction over 10 years. But White House press secretary Jay Carney said the president knows much more is required.

"The speech will once again demonstrate the president's seriousness about deficit reduction," Carney said.

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Obama turns next to cutting deficit

By Manuel Balce Ceneta, AP

President Obama speaks to visitors at the Lincoln Memorial after reaching a deal with Congress to avert a government shutdown.

EnlargeCloseBy Manuel Balce Ceneta, AP

President Obama speaks to visitors at the Lincoln Memorial after reaching a deal with Congress to avert a government shutdown.

"Every corner of the federal government has to be looked at," White House senior adviser David Plouffe told CNN's State of the Union on Sunday, two days after Obama and congressional leaders struck a down-to-the-wire deal over spending cuts for the remainder of this budget year, which ends in September.

That agreement, which averted a partial government shutdown, would cut $38.5 billion. Many of those cuts involve money that was allocated but had not yet been spent. More details are expected to be released today as Congress prepares to vote on the agreement later this week.

SPENDING: Budget deal ups the political anteTIMELINE: A closer look at the budget dealGOP HOPEFULS: Budget fight far from over With that budget drama largely behind him, Obama is preparing for a new set of showdowns. In a series of talk-show appearances on Sunday, Plouffe gave a broad outline of Obama's proposal. He said the president favors increasing taxes for top earners and limiting benefits in Medicare and Medicaid.

Plouffe said the White House does not believe Social Security is contributing to the short-term deficit. He said deficit-reduction will not be done by "putting all the burden on seniors."

Republicans said Obama lacks credibility on the deficit.

Sen. Jeff Sessions, R-Ala., the senior Republican on the Senate Budget Committee, said Obama's new plan follows the release in February of a fiscal 2012 budget proposal that was "the most irresponsible spending plan any president has ever put forward."

That $3.7 trillion plan would cut $1.1 trillion from the deficit over 10 years. In December, Obama's bipartisan fiscal commission voted 11-7 on a plan that recommended $3.9 trillion in reductions over a decade. House Republicans are aiming for even more dramatic cuts. In a blueprint issued last week, Budget Committee Chairman Paul Ryan of Wisconsin called for $5 trillion in cuts over the next decade.

Sessions said it "will not be sufficient for the president to simply make a speech" Wednesday. Instead, he said Obama must submit a new budget to Congress.

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Obama turns next to cutting deficit

By Manuel Balce Ceneta, AP

President Obama speaks to visitors at the Lincoln Memorial after reaching a deal with Congress to avert a government shutdown.

EnlargeCloseBy Manuel Balce Ceneta, AP

President Obama speaks to visitors at the Lincoln Memorial after reaching a deal with Congress to avert a government shutdown.

"Every corner of the federal government has to be looked at," White House senior adviser David Plouffe told CNN's State of the Union on Sunday, two days after Obama and congressional leaders struck a down-to-the-wire deal over spending cuts for the remainder of this budget year, which ends in September.

That agreement, which averted a partial government shutdown, would cut $38.5 billion. Many of those cuts involve money that was allocated but had not yet been spent. More details are expected to be released today as Congress prepares to vote on the agreement later this week.

SPENDING: Budget deal ups the political anteTIMELINE: A closer look at the budget dealGOP HOPEFULS: Budget fight far from over With that budget drama largely behind him, Obama is preparing for a new set of showdowns. In a series of talk-show appearances on Sunday, Plouffe gave a broad outline of Obama's proposal. He said the president favors increasing taxes for top earners and limiting benefits in Medicare and Medicaid.

Plouffe said the White House does not believe Social Security is contributing to the short-term deficit. He said deficit-reduction will not be done by "putting all the burden on seniors."

Republicans said Obama lacks credibility on the deficit.

Sen. Jeff Sessions, R-Ala., the senior Republican on the Senate Budget Committee, said Obama's new plan follows the release in February of a fiscal 2012 budget proposal that was "the most irresponsible spending plan any president has ever put forward."

That $3.7 trillion plan would cut $1.1 trillion from the deficit over 10 years. In December, Obama's bipartisan fiscal commission voted 11-7 on a plan that recommended $3.9 trillion in reductions over a decade. House Republicans are aiming for even more dramatic cuts. In a blueprint issued last week, Budget Committee Chairman Paul Ryan of Wisconsin called for $5 trillion in cuts over the next decade.

Sessions said it "will not be sufficient for the president to simply make a speech" Wednesday. Instead, he said Obama must submit a new budget to Congress.

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