Obama praises "Gang of Six" budget measure
President Barack Obama said Tuesday there has been "some progress" in negotiations with bipartisan lawmakers over raising the nation's debt ceiling.
But Obama says lawmakers are nearing the "11th hour" as an Aug. 2 deadline to raise the debt ceiling nears. He praised a proposal from leaders of the bipartisan "Gang of Six" who say they're nearing agreement on a major plan to cut the deficit by more than $4 trillion over the coming decade.
The president's remarks come as House Republicans pushed ahead Tuesday toward a vote on legislation that would raise the nation's debt limit in exchange for trillions of dollars in federal spending cuts and congressional approval of a constitutional amendment requiring a balanced budget.
But with the measure facing a veto threat from the White House, Speaker John Boehner said he was exploring other alternatives to avoid a government default threatened for Aug. 2.
"I do think it's responsible for us to look at what Plan B would look like," he said at a news conference a few hours before the opening of debate on the legislation backed by conservative lawmakers.
Advocates of the House legislation said it would cut spending by an estimated $111 billion in the next budget year and then by more than an additional $6 trillion over a decade - and require Congress to send a balanced budget amendment to the Constitution to the states for ratification - in exchange for raising the debt limit by $2.4 trillion.
With Democrats strongly opposed, the measure is given no chance of clearing the Senate, and even if it did, Obama's veto threat means it cannot become law.
On a day that promised political theater, a group of House Republicans also boarded a bus for a 16-block ride to deliver a letter asking President Barack Obama to disclose his own plan for reducing federal deficits.
No administration officials were present to meet the delegation when the bus rolled to a stop outside the White House gates, and lawmakers gave copies of the letter to reporters.
Democrats said it was urgent that the debt ceiling be raised.
In a closed-door meeting in the Capitol, House Democrats listened to an audio of Republican President Ronald Reagan urging lawmakers in 1987 to raise the debt limit. "This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans' benefits," he said then.
Nearly a quarter of a century - and numerous trillions of dollars in debt - later, Obama needs acquiescence from the Republican-controlled House and the Democratic-controlled Senate to win another debt ceiling increase. So far, efforts to agree on a package of spending cuts - the price demanded by GOP lawmakers for their votes - have proved futile.
At his news conference, Boehner did not outline what alternatives he had under review.
One prominent fallback plan is a bipartisan measure developed by the Senate's two leaders to allow Obama to raise the debt limit without prior approval by Congress while simultaneously creating a committee of lawmakers to recommend cuts in benefit programs by the end of the year.
Officials have also discussed attaching as much as $1.5 trillion in deficit cuts to the measure, including about $1.3 trillion in spending reductions and $200 billion in savings on interest payments.
Lengthy negotiations on deficit cuts involving the administration and lawmakers of both parties ended in futility last week. Obama wants tax increases included in any deal alongside cuts in benefit programs, and Republicans rejected the trade-off.
With only two weeks remaining before a threatened default, other groups were at work trying to make the case for a large cut in deficits.
A group of three Republicans and three Democrats in the Senate circulated a proposal that would cut deficits by $3.7 trillion over 10 years. The blueprint calls for raising $1 trillion in additional revenue through an overhaul of the tax law.
Republicans in control of the House, backed by Senate GOP leader Mitch McConnell, extolled their legislation, while Democrats condemned it.
Majority Leader Harry Reid, D-Nev., said it would "impose arbitrary, reckless budget caps that would - without a doubt - force massive cuts to Medicare, Social Security and other crucial benefits. At the same time, it would constitutionally protect wasteful loopholes and tax breaks for millionaires and billionaires."
Republicans have not yet released the details of the balanced budget amendment they want sent to the states, but officials say it would require a supermajority in both houses to raise taxes.
On Monday, the White House attacked the "cut, cap and balance" idea as an assault on cherished programs. The measure doesn't contain any actual spending cuts but promises they will be made in the future.
"What we are witnessing here with this measure is classic Washington posturing, kabuki theater," said White House press secretary Jay Carney, adding that the measure would "dismantle ... our social safety net: Social Security, Medicare and Medicaid."
Barring action by Congress to raise the $14.3 trillion debt ceiling, the Treasury will be unable to pay all the government's bills that come due beginning Aug. 3. Administration officials, Federal Reserve Chairman Ben Bernanke and others say the resulting default would inflict serious harm on the economy, which is still struggling to recover from the worst recession in decades.
Reid announced Monday that the Senate would meet each day until the issue was resolved, including weekends. (Copyright 2011 by The Associated Press. All Rights Reserved.)