President Barack Obama finally got involved in talks to raise the nation’s debt ceiling on Monday, a move that both sides agree changes the nature of the discussion.
Now every item of spending, including such sacred cows as the military and Medicare, will be on the table as Republicans and Democrats hammer out a deal.
“When we say everything is on the table, that’s what we mean,” House Majority Whip Kevin McCarthy said.
But the only thing Republicans are holding firm on is that there can be no increase in taxation while Democrats insist loopholes in the tax code need to be closed.
Obama was meeting the leaders of the Senate in separate Oval Office talks on Monday in a bid to kickstart bipartisan talks which stalled last week when the GOP walked out. He and Vice President Joe Biden talked to Democrat Harry Reid in the morning and were due to meet Republican Mitch McConnell later.
The president has just five weeks to bring the two sides to an agreement that will allow the country to raise the $14.3 trillion ceiling before Aug. 2 or risk defaulting on its debts.
But there are huge gaps to bridge. House Speaker John Boehner insists the increase in the limit must be offset with spending cuts without any tax hikes.
"These are the realities of the situation," he said. "If the president and his allies want the debt limit increased, it is only going to happen via a measure that meets these tests."
McConnell said, “Throwing more tax revenue into the mix is not going to produce a desirable result, and it won't pass. Putting aside that Republicans don't like to raise taxes, Democrats don't either."
For the Democrats, White House Press Secretary Jay Carney said, "We won't support an approach that gives millionaires and billionaires $200,000 tax cuts annually while 33 seniors pay for that with $6,000 per person increase in their Medicare costs.”
Biden had been leading the talks, which had involved Rep. Eric Cantor and Sen. Jon Kyl on the GOP side and Sens. Max Baucus and Daniel Inouye and Reps. James Clyburn and Chris Van Holland for the Democrats. But they came to a screeching halt when Cantor walked out on Thursday, and Kyl followed.
Carney said the involvement of the president, and the leaders of the two parties in both the Senate and the House had always been inevitable.
"It is not as though this negotiating group could simply declare into law what they agreed on,” he said. “The process was always going to have to proceed out of the negotiating room and move forward with the engagement of the speaker, Senate leaders, the House minority leader, the president, et cetera."
Politically, Boehner has the most to lose now that the talks have moved to another level. Many pundits believe Cantor’s decision to quit the talks was a politically motivated bid to score points with tea party members and other conservatives in the GOP.
“The Speaker is now politically exposed to fire from every direction as he goes into the final phase of negotiations with President Obama and the Democrats,” Fox News analyst Juan Williams wrote in The Hill.
Williams had harsh words for Cantor, saying he “threw Boehner under the bus,” by leaving the talks and telling the Wall Street Journal before informing leaders of his own party. “Now there is a new and profoundly rude way to announce a political divorce,” wrote Williams.
“The bottom line is that Cantor’s decision to abdicate any pretense of being a political leader set a trap for Boehner.”
The political implications are also huge for Obama, who won’t want to go into next year’s election as the president who allowed the country to default. A Gallup poll last week showed his approval rating has slumped to 45 percent, trailing his disapproval rating of 48 percent. A poll from The Hill earlier this month showed 48 percent of likely voters believe he has hurt the economy, and only 41 percent think he’s helped it.
But there are signs of hope that the new talks could succeed. Republicans have softened in recent days on the question of cuts to military spending, especially as troops prepare to leave both Afghanistan and Iraq.
Defense spending perviously had been seen as nonnegotiable within the GOP. But news stories that have revealed the military is spending $20 billion a year in air-conditioning costs alone have suggested there is room for cuts at the Pentagon.
Freshman GOP Rep. Adam Kinzinger of Illinois, an active-duty Air National Guardsman who flew missions in Iraq, acknowledged in The Washington Post that defense spending is “a pillar of Republican strength.” But he added, “Look, I know there are sacred cows, but we cannot afford them anymore,”
And another Republican, Rep. Robert Hurt of Virginia, said, “I would never support anything that would reduce the safety of the troops on the ground. But bureaucracy is bureaucracy, and there are ways to get at it, even in the Pentagon.”
The Democrats have moved, too. Before he left the talks, Cantor had even praised them for finding $2 trillion in cuts over 10 years.
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