Tense Exchange Between Obama, Cantor Abruptly Ends Budget Meeting
A tense exchange between President Obama and House Majority Leader Eric Cantor (R-Va.) on Wednesday ended the fourth consecutive meeting this week of a group of negotiators discussing a fiscal year 2012 budget and debt-limit package, Politico reports (Allen/Sherman, Politico, 7/13).
Background on Budget Negotiations
The negotiations between top congressional leaders and the president steadily have been rising in urgency as the group attempts to finalize a deal to increase the federal government's current borrowing cap of $14.3 trillion, or risk a federal default scheduled to take effect on Aug. 2.
However, negotiations have reached a stalemate because of partisan disagreements over taxes and entitlement spending. Republican lawmakers want broad spending cuts and entitlement reforms, while Democrats have sought new tax increases to generate revenue (California Healthline, 7/13).
Details of Latest Meeting
Speaking to reporters after the meeting, Cantor said that Obama became "agitated" after he noted that Republicans now support the idea of holding two votes to increase the debt ceiling before the 2012 elections, which the president opposes.
According to Cantor's account of the exchange, Obama told him that unlike past presidents, he is willing to participate in the budget negotiations to reach a deal (Berman/Youngman, The Hill, 7/13). Obama then warned Cantor, "Eric, don't call my bluff," adding, "I'm going to the American people with this" (Schatz, CQ Today, 7/13). Obama then "said, 'I'll see you tomorrow' and walked out," Cantor added (Politico, 7/13).
However, a Democratic aide with knowledge of the exchange said that the account of Obama's sudden exit had been exaggerated, adding that Obama "said what he was going to say, he got up and walked out."
House Minority Leader Nancy Pelosi (D-Calif.) said Obama "stayed for two and a half hours and listened to what members had to say," adding, "It was his meeting and [it] had come to an end" (Berman/Youngman, The Hill, 7/13).
One Democrat in attendance said that Obama "lit up Eric Cantor like he's never been lit up" (Rogers, Politico, 7/13).
Despite the exchange, Democrats noted that some progress had been made toward an agreement to lower the federal deficit.
Obama offered a 10-year, $1.7 trillion deficit-reduction proposal, and lawmakers on both sides have agreed in principle to about $1.5 trillion of those cuts, the officials said.
The group is scheduled to meet again on Thursday to discuss revenue, a sticking point in the negotiations for the GOP, and mandatory health programs, Politico reports (Allen/Sherman, Politico, 7/13).
GOP, Democrats Split on McConnell's Contingency Plan
Meanwhile, prominent GOP lawmakers are continuing to differ on the backup budget and deficit-reduction plan that Senate Minority Leader Mitch McConnell (R-Ky.) unveiled on Tuesday, The Hill reports (Bolton, The Hill, 7/13).
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).
Sen. John McCain (R-Ariz.) called McConnell's proposal a "smart, forward-looking plan" that he hopes will motivate Democrats and Republicans to "seriously negotiate an agreement" (Schatz, CQ Today, 7/13).
Senate Republican Conference Chair Lamar Alexander (Tenn.) said the GOP should support the plan because he predicts Republicans will be better positioned after the 2012 elections -- when the GOP reclaims control of the Senate and the White House, he said -- to enact a broader package of spending cuts and entitlement reforms (Bolton, The Hill, 7/13).
However, Cantor and other key GOP House lawmakers oppose the McConnell proposal and have vowed to press forward with their plan to implement more immediate spending cuts.
In a tacit rejection of the proposal, Cantor issued a statement before Wednesday's White House meeting, stating, "Currently, there is not a single debt-limit proposal that can pass the House" (Kane/Montgomery, Washington Post, 7/13).
On Wednesday, Democrats also offered both praise and criticism of McConnell's backup proposal, according to The Hill.
Pelosi said the proposal has "merit," while Senate Majority Leader Harry Reid (D-Nev.) said he was "heartened" by the plan (Bolton, The Hill, 7/13).
However, Senate Budget Committee Chair Kent Conrad (D-N.D.) called the proposal "one of the worst ideas I've ever heard." Conrad, who unveiled the Senate Democrats' FY 2012 budget blueprint on Monday, added, "To extend the debt limit and not do anything about the debt, that is an abdication of responsibility that is stunning" (Friel/Ota, CQ Today, 7/13).
Reid, McConnell To Work To Improve Contingency Plan
On Wednesday, Reid announced that he will work with McConnell to improve the plan.
Reid has indicated that some portions of the plan, which likely would total about $1 trillion in spending cuts over 10 years, could be combined with other spending cuts identified during the bipartisan negotiations led by Vice President Biden, Senate leadership aides said (Friedman, National Journal, 7/13).
That group reportedly had agreed on a package of at least $1.5 trillion in spending cuts, according to the Washington Post. Under the Reid-McConnell partnership, a bipartisan panel of 12 lawmakers also would be established with the authority to identify and recommend to Congress trillions of dollars more in additional savings. Those recommendations would be fast-tracked and exempt from certain legislative rules, the Post reports (Washington Post, 7/13).
Coburn Hints at Return to 'Gang of Six'
On Wednesday, Sen. Tom Coburn (R-Okla.) acknowledged and refused to counter rumors that he is preparing to return to the "Gang of Six," the bipartisan group of senators who had been working on FY 2012 budget and deficit-reduction legislation, the AP/Miami Herald reports.
Coburn left the group in May after facing resistance to his efforts to cut entitlement spending, including immediate reductions for Medicare.
Coburn said his return to the group would be contingent on the remaining members' reception to several ideas he has "floated" in recent weeks, including the Medicare overhaul proposal he introduced last month with Sen. Joseph Lieberman (I-Conn.) (Taylor, AP/Miami Herald, 7/13).