U.S. Democrats and Republicans are starting to agree on significant spending cuts as they step up talks to stabilize the country's long-term finances, a top Republican lawmaker said on Monday.
"There's room for us to agree on trillions of dollars in savings," Eric Cantor, the No. 2 Republican in the House of Representatives, told reporters. "We are beginning to see the essence of convergence on savings begin to happen."
Cantor and other negotiators face growing pressure to reach an agreement that would narrow record budget deficits and raise the country's $14.3 trillion debt ceiling before an Aug. 2 deadline.
The Treasury Department has warned that the country could face a default if the debt ceiling is not raised by then -- a prospect that could push the country back into recession and rattle markets across the globe.
Cantor said he hoped the group including Vice President Joe Biden would strike a deal that would ensure Congress would not have to revisit the politically painful issue before the November 2012 elections.
With Republicans insisting any increase must be matched by an equal amount of spending cuts, that means the group would have to agree on roughly $2.4 trillion in spending cuts.
Ahead of three days of talks, Cantor went out of his way to praise Biden's stewardship of the group, which includes five other top lawmakers.
"I've been very impressed with the way he conducts these meetings. He does like to talk but I guess all of us do or we wouldn't be here. I do believe he has conducted these meetings in a way that has kept the ball rolling," said Cantor, who is not normally known for his effusive praise of Democrats.
The sputtering economy poses an additional challenge for the negotiators as they seek to trim budget deficits that in recent years have hovered at their highest levels relative to the economy since World War Two.
Washington is unlikely to sign off on aggressive new stimulus efforts as Republicans push for spending cuts rather than additional deficit spending. Cantor said those cuts could be spread out over 10 years, which would minimize their impact in the short term.
"We are trying to look toward a plan that will manage down the debt and deficit and at the same time help signal a return to economic growth," Cantor said.
The deficit-reduction group is scheduled to tackle annual spending and budgetary process reforms in three meetings this week.
(Editing by Cynthia Osterman)
© 2016 Thomson/Reuters. All rights reserved.