Boehner Ends Bipartisan Budget Talks; GOP To Develop New Plan
On Saturday night, House Speaker John Boehner (R-Ohio) night ended efforts to work with Democrats to reach a $4 trillion deficit-reduction plan tied to a proposal to increase the federal debt limit, the New York Times reports (Hulse, New York Times, 7/9).
In recent days, the administration and Democrats have considered GOP-backed proposals that would cut tens of billions of dollars from Medicare and Medicaid as part of budget negotiations, but Republicans have been unwilling to consider new tax increases.
The parties agreed last week to set a goal of developing the largest possible budget package with savings of up to $4 trillion. Lawmakers have until Aug. 2 to raise the federal debt ceiling (California Healthline, 7/8).
GOP To Develop New Package
According to Boehner, Republicans now will focus on developing a smaller budget package. He said, "Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes," adding, "I believe the best approach may be to focus on producing a smaller measure â¦ that still meets our call for spending reforms and cuts greater than the amount of any debt limit increase."
Boehner said lawmakers should base the new plan on cuts identified last month during bipartisan negotiations led by Vice President Biden, which could save between $2 trillion and $3 trillion (New York Times, 7/9).
Proposals developed under the Biden talks include cuts to federal agency budgets and modest changes to government health programs. Negotiators had agreed upon about $1.5 trillion in savings when the talks were suspended. Boehner is demanding at least $2.4 trillion in cuts in order to raise the debt limit (Kane/Montgomery, Washington Post, 7/9).
Obama Calls for Continued Negotiations
At a meeting on Sunday, President Obama encouraged lawmakers to continue seeking the $4 trillion package. He said that America is not a "banana republic," so he will not agree to multiple short-term debt increases.
He said that both parties likely will suffer politically from making necessary concessions during budget talks but that they need to accomplish something substantial, according to sources familiar with the meeting (Budoff Brown/Rogers, Politico, 7/10).
However, Republicans continued to resist the larger agreement on Sunday. House Majority Leader Eric Cantor (R-Va.) and Senate Minority Whip Jon Kyl (R-Ariz.) reiterated that they would not consider tax increases as part of budget talks and pushed for a smaller measure (House/Friedman, National Journal, 7/11).
Obama told lawmakers that they will meet at the White House daily until a deal is reached (Politico, 7/10).
Senate Democrats Draft Separate Plan
Apart from negotiations between congressional leaders and Obama, Senate Democrats have developed their own debt-reduction plan that would cut $4 trillion by lowering spending and increasing taxes by $2 trillion. The plan would avoid making significant cuts to Medicare.
A Senate Democrat said, "The very strong feeling was we needed to get this into the conversation because it provides an alternative view" of the budget.
Senate Budget Committee Chair Kent Conrad (D-N.D.) last Friday briefed Obama and Biden on the plan at the White House (Montgomery, Washington Post, 7/8).
According to the Post's "2Chambers," some lawmakers are angered by reports that Obama is willing to make significant cuts to Medicare to reach a budget agreement with the GOP.
After a recent meeting with the House Democratic Caucus, House Minority Leader Nancy Pelosi (D-Calif.) said that Democrats in the chamber "would not reduce the deficit or subsidize tax cuts for the rich on the backs of America's seniors" (Sonmez, "2Chambers," Washington Post, 7/8).
Entitlement Cuts Still a Possibility
Senate Minority Leader Mitch McConnell (R-Ky.) during an interview on "Fox News Sunday" said that long-term changes to entitlement programs such as Medicare and Medicaid still would be part of a smaller budget agreement. He said entitlement cuts "ought to be part of any deal we make" (Zigmond, Modern Healthcare, 7/10).
In related news, analysts at research firm Oppenheimer said they estimate that a debt-ceiling agreement can be reach by Aug. 2. The researchers expect the final deal to include up to $150 billion in cuts to federal health programs over the next decade (Zigmond, Modern Healthcare, 7/8).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.