Tags: US | Debt | Limit

Cantor 'Cautiously Optimistic' on Debt Talks

Tuesday, 07 Jun 2011 02:53 PM

 

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WASHINGTON (AP) — The No. 2 Republican in the House says he's "cautiously optimistic" that ongoing budget talks led by Vice President Joe Biden will produce an agreement on budget cuts at least as large as the accompanying increase in the government's ability to borrow.

Majority Leader Eric Cantor, R-Va., who's representing the Republican-controlled House in the talks, told fellow lawmakers in an e-mail Monday that the Biden-led group is scrubbing all of the major spending programs of the federal budget for potential savings, including health care programs for the elderly and the poor.

Speaker John Boehner, R-Ohio, has put forth a marker that any increase in the so-called debt limit should be matched by spending cuts at least equaling the new level of permitted borrowing. The national debt has reached the current $14.3 trillion cap, but the Treasury Department is juggling government accounts to free up enough money to prevent the government from defaulting on its obligations until Aug. 2.

"I am cautiously optimistic we can find sufficient common ground with the administration to enact spending cuts that meet the goal outlined by the speaker," Cantor wrote.

Biden said last month that the group, which includes top lawmakers from both parties, is on pace to generate savings exceeding $1 trillion. At the White House last week, President Barack Obama predicted to House Democrats that the Biden group would come up with perhaps 60 to 70 percent of the requisite budget cuts and that he and Boehner would negotiate the remainder.

"Achieving the level of spending reductions we all desire will mean that virtually every category of federal spending will see some level of cuts," Cantor said. "I suspect that the special interests and the usual defenders of federal spending will vigorously oppose these cuts."

Cantor didn't explicitly mention the Medicare health program for the elderly — which is currently the subject of a pitched political battle and a rallying point for Democrats — but other top Republicans like Senate Minority Leader Mitch McConnell of Kentucky insist that cost cuts to the program be part of any final agreement.

A controversial House GOP plan to turn Medicare into a voucher-like program for future beneficiaries is rigorously opposed by Democrats, but Obama himself has proposed cuts to Medicare providers.

Cantor made no mention of cuts to Social Security, and the topic is not believed to be part of the talks.

The government borrows an average of about $125 billion a month. The administration hasn't said how big of an increase in the debt limit it would like, but a key consideration is whether to raise it enough to get through next year's elections. But that would require a borrowing increase of about $2 trillion.

On Tuesday, the Congressional Budget Office estimated that the government has run a $936 billion deficit over the first eight months of the budget year that ends Sept. 30.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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