In another sign that the Joe Biden-led deficit talks will go down to the wire, splinter groups from both parties are beginning to push for specific measures in the final debt reduction package. Yet again, this will make the task facing lawmakers already struggling to find compromises more difficult as the rhetoric gets nastier and more accusatory.
Five Senate Democrats held a press conference Wednesday morning to press the Biden committee to include job measures in the final debt reduction package. The group simultaneously accused Republicans of deliberately attempting to sabotage the economy for political gain in 2012.
The Democrats called for new stimulus funds for highway construction, clean energy subsidies and a payroll tax cut aimed at reducing the 9.1 percent unemployment rate. They did not submit a specific dollar amount for the new spending.
“Unfortunately our Republican colleagues in the House and Senate are driven by putting one man out of work—President Obama,” said Majority Whip Sen. Dick Durbin of Illinois. “They want to play political games at the expense of getting the economy back on its feet. They believe that a weak economy is their best chance at planning for the next election.”
Sen. Chuck Schumer, D-NY, echoed his colleague’s attacks. “We need to get back to putting jobs first. Deficit reduction alone is not a cure for what ails our economy. It almost makes you wonder if they are trying to slow down the economic recovery for political gain,” he said.
Michael Steel, spokesperson for House Speaker John Boehner of Ohio, rejected the charge. “Getting our debt and deficit under control IS a job-creation measure,” he said.
Since the beginning of May, Biden along with six Republican and Democratic House and Senate lawmakers have been negotiating a deal aimed at taming the spiraling national debt and raising the $14.3 trillion debt ceiling. The Biden group is racing through discussions as they face a self-imposed July 1 deadline. The Treasury Department says the U.S. will be unable to pay its bills after August 2 unless the debt ceiling is raised, which could lead to the first default in U.S. history and deal a catastrophic blow to an already fragile economy.
Emerging from a three hour meeting on Wednesday, Rep. Chris Van Hollen, D-Md., said the Senate Democrats’ call for a jobs package wasn’t a topic of conversation. “We’ve said all along that one of our principals in these discussions is first do no harm in the fragile economy, do nothing that would threaten jobs and in fact you need to make room for critical investments in education, research and technology, infrastructure,” he told reporters. “That needs to be part of our budget.”
Republicans are demanding that the level of spending cuts match the increase in the debt ceiling dollar for dollar. Biden has said he is confident his team will be able to find more than $2 trillion in savings over the next ten years from the federal budget.
Republicans and Democrats remain at loggerheads over revenues and entitlement programs like Medicare. The committee will meet several more times this week. Among other issues, they are expected to discuss budget “triggers” on Thursday which would automatically cut spending or raise taxes when the government strayed from the path of deficit reduction.
“We are still slogging away. Everyone is around the table dealing with some very tough issues,” Van Hollen said. “We’re going to keep working at it until we get an agreement in principal or reach the conclusion that we cannot bridge our differences.”
Durbin told reporters he doubts the Biden group will be able to hammer out a deal before the August 2 deadline. He advocated for a two-step process where a “serious down payment on the deficit” would allow lawmakers more time to hash out their differences. Durbin’s comments came days after House and Senate Republicans split over whether the debt ceiling should be raised incrementally.
Meanwhile, Tea Party backed House and Senate Republicans are demanding Biden’s “Gang of Seven” include “substantial” spending cuts next year, enforceable spending caps, and a vote on a balanced budget amendment to the Constitution in exchange for their support to raise the debt ceiling.
“The national debt is a growing cancer on our economy,” said Republican Study Committee Chairman Jim Jordan of Ohio at a press conference Wednesday afternoon. “It is abundantly clear that we must not raise the debt limit without bold changes that can put the country back on track.”
Stan Collender, a federal budget expert and partner at Qorvis Communications, said the emergence of new demands from the liberal and conservative wings of both parties did not bode well for the talks. “Both parties are using the talks as a way to promote separate agendas,” he said. Last month, debt talks from a separate bipartisan group of six senators fizzled, adding pressure for the Biden committee to produce a substantive deficit framework.
Two top budget and finance Senators have separately expressed skepticism that the Biden group’s framework will produce results. Speaking on the Senate floor Wednesday, Sen. Bob Corker R-Tenn., warned that the closed-door meetings might be too modest and gain little traction with other Senators.
“I'm concerned that the type of deal that they may be trying to seek is not something that many of us in this body would even agree to, if they reached it, meaning it's far more modest than I think most of us have been looking at,” Corker said. He demanded the commission “publicly tell us by the end of next week what deal it is they're trying to accomplish and what time frame.”
On Tuesday, Budget Committee Chairman Sen. Kent Conrad (D-Mont.) reiterated his support for $4 trillion in spending cuts over 10 years, similar in scope to the reductions sought by the president's deficit commission, chaired by Democratic Erskine Bowles and former Republican Sen. Alan Simpson. Conrad told The Washington Post,
I think most serious observers would
tell you that it takes a package of at least
$4 trillion to fundamentally change the trajectory
we're on," Conrad told reporters. "In the
context of our debt, which is nearly $15 trillion
and is headed for $25 trillion, $2 trillion
over 10 years does not do the job."
The Congressional Budget Office released an annual report Wednesday offering a fresh reminder of what's at stake in the ongoing Biden talks. CBO analysts say the national debt will exceed the size of the economy by 2021 without cuts to entitlement programs and increases in taxes.
A new Bloomberg poll found Americans are split, 45 percent to 46 percent, on whether Republicans should hold out for more spending cuts even if the delay leads the government to default on its obligations. Only 19 percent say such an outcome would be catastrophic, suggesting such warnings from lawmakers, economists and Wall Street executives aren’t resonating with the public. Still, 52 percent of Americans say a default would be a serious problem.
Related Links:
Democrats Call for New Spending in Debt Deal (Reuters)
CBO Warning Debt May Be Double GDP (Politico)
Sen. Corker Says Emerging Debt Ceiling Deal May Not Find GOP Support (The Hill)
