Obama Urges Congress To Reach Budget Deal Within 24 to 36 Hours

On Thursday, President Obama said congressional leaders working toward a fiscal year 2012 budget and debt-limit proposals must develop and present a framework for a deal within 24 to 36 hours, Politico reports.

The group had just ended its fifth consecutive day of negotiations, and Obama warned that they should be prepared to return to the negotiating table this weekend if they do not present a deal soon (Raju [1], Politico, 7/14).

Background

Progress in the talks to finalize a budget and deficit-reduction deal and legislation to increase the government's current borrowing cap of $14.3 trillion have been held up by partisan disagreements over entitlement cuts and tax increases.

GOP lawmakers want broad spending cuts and entitlement reforms, while Democrats have sought new tax increases to generate revenue. Congress has until Aug. 2 to raise the debt ceiling or risk a federal default on debt obligations (California Healthline, 7/14).

Thursday's Meeting

A Democratic official briefed on Thursday's meeting said the group covered familiar ground, but it remains at an impasse on the same sticking points (Landler/Pear, New York Times, 7/14). According to the official, Obama told the leaders that it is "decision time" and that they must provide "concrete plans to move this [debate] forward."

Alluding to the issue that sparked a heated exchange with House Majority Leader Eric Cantor (R-Va.) at Wednesday's meeting, Obama reiterated that he will not sign a short-term stopgap measure and that he will continue to seek "the biggest deal possible" (Youngman/Wasson, The Hill, 7/14).

According to the Washington Post's "2chambers," the negotiating group is not scheduled to meet with Obama on Friday, indicating that they will huddle with aides to formulate the framework he requested (Sonmez, "2chambers," Washington Post, 7/14).

In the meantime, Obama is scheduled to hold a news conference on Friday at 11 a.m. to provide "the status of efforts" to reach agreements on the fiscal issues, according to White House officials (House et. al, National Journal, 7/15).

GOP Opposition to McConnell's Contingency Plan Grows

A growing number of Republican lawmakers are expressing publicly their disapproval of the backup budget and deficit-reduction plan unveiled by Senate Minority Leader Mitch McConnell (R-Ky.) on Tuesday (Allen/Sherman, Politico, 7/15).

Under McConnell's plan, which he described as a "last-choice option" to break the ongoing stalemate, the Obama administration would seek Congress' approval to raise the debt ceiling by $2.5 trillion over three installments in the next 18 months, which would take effect through legislative maneuvering. Meanwhile, the proposed spending cuts would be debated in Congress under normal appropriations procedures, without any guarantee that lawmakers would ever vote on them (California Healthline, 7/13).

Reps. Jim Jordan (R-Ohio) and Tom Rooney (R-Fla.) both said they would not consider McConnell's plan, adding that they have heard from other Republicans who have said the same (Allen, Politico, 7/15).

However, House Speaker John Boehner (R-Ohio) has remained neutral on the plan and declined to reject it outright. On Thursday, Boehner suggested that while it "may look like something less than optimal today ... [it] might look pretty good a couple of weeks from now" if a bipartisan agreement remains elusive (Allen, Politico, 7/15).

'Gang of Six' Develops Plan That Includes Entitlement Cuts

The five remaining members of the "Gang of Six" -- the bipartisan group of senators that convened earlier this year to work on FY 2012 budget and deficit-reduction legislation -- have developed a new proposal that would cut the deficit by $3.6 trillion to $3.7 trillion over 10 years, according to Senate Budget Committee Chair Kent Conrad (D-N.D.), CQ Today reports.

The proposal would eliminate the alternative minimum tax, and the Congressional Budget Office would score the overall plan as a $1.5 trillion tax cut, he added. Conrad noted that the package "does have entitlement reform" and it "does have significant domestic spending cuts that are balanced, security and non security" (Friel, CQ Today, 7/14).

Lawmakers Might Consider Raising Medicare Costs

Stalled budget negotiations might necessitate consideration of divisive proposals that would increase Medicare beneficiaries' copayments, deductibles or premiums, the Los Angeles Times reports. Experts say that some lawmakers might avoid such measures before the 2012 election but could consider them after.

Henry Aaron of the Brookings Institution said such proposals are inevitable. He added, "Over the long haul, beneficiaries will have to pay more and taxpayers will have to pay more," noting that Medicare is "just too darn expensive" (Levey, Los Angeles Times, 7/15).

Drug Industry, Cantor Fight Discounts

Proposals that would require brand-name drugmakers to provide rebates for individuals eligible for both Medicare and Medicaid -- so-called "dual eligibles" -- again are being considered by lawmakers searching for debt-reduction strategies.

Depending on how the proposal -- which has been endorsed by the White House -- is developed, drugmakers would have to pay anywhere from $50 billion to $100 billion to the federal government.

The proposal has encountered opposition from both the Pharmaceutical Research and Manufacturers of America and Cantor, which could be enough to end consideration of it (DoBias, Politico, 7/14).