‘Hard bargaining’ on debt limit looms
Obama, lawmakers to meet again on budget Sunday
Thursday, July 7, 2011
WASHINGTON—President Barack Obama looked forward Thursday to a weekend of “hard bargaining” with Republicans over the federal budget deficit — but faced a rebellion from his own Democrats and the elderly over possible cuts to Social Security, adding yet another explosive issue to an already volatile mix.
Obama met with congressional leaders of both parties Thursday morning in the Cabinet Room of the White House, their first session to discuss the deficit cuts Republicans demand in return for voting to raise the government’s debt ceiling.
Treasury Secretary Timothy Geithner has warned that if Congress doesn’t raise the ceiling by Aug. 2, the government could go into default. That could panic financial markets and kick the economy back into recession.
Obama called the Thursday meeting “very constructive” and said he would reconvene the eight leaders at the White House on Sunday after congressional and White House staff meet Friday and Saturday to hash out the details of everyone’s opening proposals.
“At that point,” Obama said, “the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.”
Obama is pressing for a “big” deal that would total about $4 trillion in cuts to projected deficits over the next 10 years. He proposed a $4 trillion plan in April that would be spread over 10 or 12 years, but recent talks had focused on a $2 trillion goal.
Rep. Peter King, R-N.Y., said before the White House meeting that he got a sense after House Republicans met Thursday morning that there was a 50-50 chance a deal could be struck within 48 hours.
However, Obama’s signal that he is willing to consider changes to Social Security set off a storm of criticism from Democrats and their supporters. And his insistence on tax increases remains a major sticking point for Republicans that could jeopardize a larger deal. How much to cut defense spending could be a deal-breaker for either side, and so could Medicare. In short, getting Democrats and Republicans to agree on major changes in all of these areas as part of a “grand bargain” is by no means guaranteed in today’s Washington, where no-compromise ideology and partisanship is the ethos of the day.
“We do not support cuts in benefits to Social Security and Medicare,” said House Minority Leader Nancy Pelosi, D-Calif. “We’re not going to balance the budget on the backs of America’s seniors, women and people with disabilities.”
AARP, the influential association of people age 50 and older, vowed to fight any cuts to Social Security or Medicare.
The group singled out one proposal to cut costs: changing the formula for increasing cost-of-living payments every year so they’d rise more slowly.
Obama aides insisted that any talks about Social Security would not be tied to deficit reduction. But they did not deny that Social Security changes would be discussed during the deficit-reduction talks.
“He has always said that it is not connected to the short- and medium-term deficit problems,” White House press secretary Jay Carney said. “It doesn’t mean that he’s not willing to talk about, as a separate matter . . . the need to strengthen Social Security in the long term in a way that doesn’t slash benefits.”
Obama himself said Wednesday that he’s ready to talk about Social Security during the debt talks.
“What we need to do is to have a balanced approach where everything is on the table,” he said. “We need to reduce corporate loopholes. We need to reduce discretionary spending on programs that aren’t working. We need to reduce defense spending. . . . We need to look at entitlements, and we have to say, how do we protect and preserve Medicare and Social Security for not just this generation but also future generations. And that’s going to require some modifications, even as we maintain its basic structure.”