McConnell Outlines Debt Deal Demands
Policy + Politics

McConnell Outlines Debt Deal Demands

Senate Republican leader Mitch McConnell told President Obama on Thursday that he must agree to cut spending on federal agencies over the next two years and make significant changes to Medicare and Medicaid as part of a deal for raising the legal limit on government borrowing.

During a White House meeting with the entire Senate Republican caucus, McConnell (Ky.) told the president that the battle over the debt limit is a critical opportunity to overhaul the popular health-care entitlement programs, which are projected to be the biggest drivers of future borrowing.

A bipartisan agreement to curb entitlement costs would reassure financial markets concerned about the nation’s ability to rein in its spiraling debt, McConnell told reporters after the meeting. Doing it now, he said, would neutralize the issue for the 2012 presidential campaign.

“If there’s a grand bargain of some kind with the president of the United States, none of it will be usable by either side in next year’s election,” McConnell said. “That is the importance of this debt ceiling moment.”

After a week in which some House Republicans seemed to retreat from backing a major overhaul of Medicare, McConnell’s remarks threw the issue squarely back on the table. McConnell said the government could see long-term savings by changing eligibility requirements for entitlements. But he did not endorse specific changes to the programs, such as House proposals to replace Medicare with private insurance financed partly by the federal government and to make affluent seniors pay more for benefits.

McConnell also referred repeatedly to an array of options considered by Obama’s fiscal commission last year, arguing that “significant” savings must come from health-care entitlements. The commission recommended an overall cap on federal health spending.

McConnell echoed House leaders’ insistence that tax increases are off the table. Although both parties agree that a major rewrite of the tax code is long overdue, McConnell said, such legislation “cannot be done between now and August” and therefore “certainly will not be accomplished.”

Without new taxes, McConnell said, Obama “is not interested in” making changes to Social Security, the other major entitlement program. “I don’t expect that to be dealt with,” he said, saying negotiations over entitlements will be limited to the health programs.

Obama’s meeting with Republicans came a day after a similar tete-a-tete with Senate Democrats and hours before a bipartisan group of lawmakers is set to meet again with Vice President Biden in hopes of cutting a debt-limit deal. The national debt is set to hit the current $14.3 trillion ceiling within the next few days, though Treasury Secretary Timothy F. Geithner said he can keep paying the bills without a higher limit through Aug. 2, when the United State would run the risk of default.

Read more at The Washington Post.