President Obama called the top two Democrats in the U.S. House and the Senate to the White House for a late afternoon meeting to discuss the debt limit. Media outlets report that President Obama and House Speaker John Boehner have been working out the details of a final deal to cut spending, overhaul the tax code, and raise the debt ceiling.
White House talks with Congressional leaders resumed as President Obama’s hopes for a deficit reduction deal to coincide with an increase to the debt ceiling resurfaced. President Obama called Congressional leaders to the White House in separate meetings to discuss the “Gang of Six” proposal.
White House Press Secretary Jay Carney said President Obama would support a short-term stop-gap measure to lift the debt ceiling if extra time is needed to allow a negotiated measure to work through the legislative process. “Obviously, if both sides agree to something significant, we will support the measures needed to finalize the details of that,” Carney said.
The “Gang of Six” plan is a framework of where to cut spending and how to increase revenue. It does not yet include legislative language but directs lawmakers to cut the deficit by $3.7 trillion over the next decade.
Even with the bipartisan agreement to cut the deficit and even though leaders from both parties say they will not allow the U.S. to default on its loans, it is still unclear how lawmakers will avoid default and beat an August 2nd deadline.
A growing number of bipartisan Senators are backing the "Gang of Six" plan, but it could be difficult to pass the U.S. House because it raises revenue.
Americans for Tax Reform founder Grover Norquist, whose anti-tax pledge many Republicans signed and campaigned on, told the Washington Post Editorial Board that allowing the Bush-era tax cuts to expire does not amount to a tax increase, which the Washington Post called a "significant" development. But in House Speaker John Boehner's (R-OH) news conference this morning, he disagreed. “I believe that would be raising taxes," Boehner said.
Speaker Boehner refused to vocalize his support of the "Gang of Six" plan and gave no indication that he is attempting to sell the idea to his conference as a means to lift the debt ceiling.
The Senate began debate this morning on the House-passed “Cut, Cap and Balance Act." It would increase the debt limit by $2.4 trillion and begin the process of amending the U.S. Constitution to require a balanced budget. But Senator Charles Schumer (D-NY) said it is “dead on arrival” in the Senate, and President Obama said he would veto it should it reach his desk. But Senator Tom Coburn (R-OK) said he would "bet a porter house steak that if this lands on his desk, [President Obama will] sign this puppy.”
Senate Leaders Harry Reid (D-NV) and Mitch McConnell (R-KY) are drafting what is widely considered a back-up plan, which would give the President unilateral authority to lift the debt ceiling in three different stages. Should it come to fruition, the Reid-McConnell plan is likely to include spending cuts worth up to $1.5 trillion.
As the August 2nd deadline nears, President Obama met with Treasury Secretary Geithner this afternoon. Geithner imposed the early August deadline as the last day the U.S. can pay all of its bills without Congress lifting the debt ceiling.
Friday, Senator Tom Coburn (R-OK) will join the Washington Journal to discuss his plan Back in Black, which would cut $9 trillion from the deficit in the next decade and his decision to endorse a $3.7 trillion proposal released by the “Gang of Six.”