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After Shutdown Showdown, Lawmakers Appear ‘Prepared to Work Together’ on Budget

May 5, 2011 at 12:00 AM EST
In Washington, Vice President Biden met with top lawmakers Thursday to begin a new round of high-level budget, deficit and spending negotiations. Jeffrey Brown discusses the looming debt deadline and the issues at play with The Washington Post's Lori Montgomery.
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JIM LEHRER: In Washington today, a new round of high-level budget and spending negotiations got under way.

Jeffrey Brown has our story.

JEFFREY BROWN: Vice President Biden met with top lawmakers from both parties today to begin talks on cutting the deficit. The bipartisan group, including House Majority Leader Eric Cantor, gathered at Blair House, across the street from the White House.

Both sides viewed the meeting as a first step, with no expectations of an immediate deal.

VICE PRESIDENT JOSEPH BIDEN: This is an opening meeting where, today I had a chance to talk a little bit with each of my colleagues. We’re going to lay down, not a hard negotiating position, but let’s make sure each of us understands what — where the other guy’s coming from.

JEFFREY BROWN: On the table now are budget plans recently put forth by both the president and House Republicans. The president’s budget has called for a $4 trillion deficit reduction over 12 years by ending tax breaks for households earning more than $250,000 a year, seeking up to $400 billion in new defense spending cuts, reducing domestic discretionary spending by $770 billion, and exacting $480 billion in fresh savings from Medicare and Medicaid.

The Republican plan, authored by Paul Ryan, would reduce the deficit by more than $4 trillion over 10 years by cutting domestic spending, reshaping Medicare, paying private health plans, instead of reimbursing doctors and hospitals directly, and converting Medicaid into block grants, giving states less money but more flexibility in caring for the poor and disabled.

Though Republicans are aware Senate Democrats are certain to block the Ryan plan from moving forward, House Speaker Boehner stood his ground.

REP. JOHN BOEHNER, R-Ohio: When it comes to increasing the debt limit and the need to have reductions in spending nothing is off the table except raising taxes.

JEFFREY BROWN: But Paul Ryan himself sounded less hopeful that his more ambitious goals will be met, saying today that Republicans are — quote — “not under any illusion that we are going to get any grand slam agreement.”

This morning’s meeting came as Congress prepares to consider raising the $14.3 trillion debt ceiling, the amount the federal government can legally borrow.

Amid concerns of a default on U.S. debt, Treasury Sec. Timothy Geithner has given lawmakers more time to negotiate. In a letter to Congress Monday, he extended the default deadline from May 16 to Aug. 2.

Exiting today’s budget session, Vice President Biden told reporters progress had been made. The bipartisan team will meet again next Tuesday.

Lori Montgomery is covering the story for The Washington Post, and joins us now.

Lori, what was the headline coming out of today’s meeting?

LORI MONTGOMERY, The Washington Post: I think the headline was that these guys are coming into the room prepared to work together. I mean, there’s been a lot of…

JEFFREY BROWN: And that is a headline, isn’t it?

LORI MONTGOMERY: It is.

JEFFREY BROWN: Because we don’t hear that too often.

LORI MONTGOMERY: We don’t hear that too often. And we have had a spring of partisan-sniping over the continuing resolution that keeps the government running through the year, relatively small potatoes.

But now these guys are coming into the room to do the big stuff, to talk about big changes over the next 10 years, to actually bring down borrowing. And suddenly you hear a very different tone, people talking about finding common ground, leaving the big issues for later.

JEFFREY BROWN: They’re doing that. I mean, there’s no — as we said, there is no deal here right? They’re laying down markers and positions. And there’s going to be a lot of to and fro, but the tone, you’re saying, was different.

LORI MONTGOMERY: Very different.

And the House majority leader, who represents Speaker Boehner in these talks, reiterated today that the starting point for these negotiations is to find areas of overlap in the two budgets that we just saw described.

JEFFREY BROWN: Now, does that — what do you make of the Paul Ryan statement today? I mean, is — that’s got to be related here. Are they — Republicans are not conceding at this point, are they, that there won’t be big changes to Medicare or Medicaid?

LORI MONTGOMERY: I don’t think they are. I think what they’re saying is, we recognize that Democrats have pledged to protect these programs. We believe that these are the largest drivers of future deficits — and they’re absolutely right about that — however, we also recognize that we need to reach an agreement to pass this debt ceiling pretty quickly. Therefore, instead of arguing forever about health care and taxes, like we always do, why don’t we start looking for some common ground and start from there?

And that seems to be the same page that everyone is on.

JEFFREY BROWN: Now, what about — what about the pressures we keep hearing about for — that — that push against both sides? Republicans have to still have that pressure from Tea Party conservatives.

LORI MONTGOMERY: Well, there was a pretty significant backlash today on Capitol Hill from this idea that Ryan expressed yesterday and Cantor also expressed yesterday that — conceding that we’re not going to get our Medicare plan in these talks, we’re very unlikely to get our Medicare plan in these talks.

And people were saying, hey, wait a minute. This — we just voted for this budget. Why should we approve additional borrowing if we don’t get those kinds of cuts?

But you’re hearing from senior Republicans in the House pretty broadly the acknowledgement that — and it may be an effort to lower expectations among their own troops — look, guys, we have got to figure out where we can get something that a Democratic president will actually sign.

JEFFREY BROWN: And speaking of a Democratic president, the pressures that he has been under from his left to avoid major spending cuts, those haven’t gone away either, right?

LORI MONTGOMERY: No they haven’t gone away. And it’s going to be very difficult.

I mean, I think whatever they come up with is going to be a hard sell for both sides because it’s not going to be a $4 trillion package. It’s very unlikely to be, so that’s not going to satisfy the one side. And on the other hand, it’s likely to cut a lot of spending and that’s going to annoy the other side.

JEFFREY BROWN: In the meantime, bring us up to date on this separate bipartisan group of senators, this so-called gang of six. This is a completely parallel track they’re on, or is there some meshing with what we’re talking about here?

LORI MONTGOMERY: That’s an excellent question, and I wish I could answer it fully.

They say that they’re still plowing ahead. Sen. Tom Coburn, who is a member of the gang of six, had to suddenly go home because of a family emergency. So they aren’t meeting right now. But they say they’re going to return to the table when they get back next week.

And I think the problem they’re facing at this point is, you know, these are three very conservative Republicans who desperately believe in this goal. But the package that they’re looking at would involve a tax reform proposal that raises additional revenue but it leaves to the committees to decide how that will happen. And I think they’re having a very difficult time signing off on something where they can’t control the particulars.

JEFFREY BROWN: Now, we — we mentioned the context here, which is the looming deadline on the debt ceiling.

Are these two things, the long-term deficit and the debt ceiling, are they inextricably tied together now, at least in terms of negotiating positions?

LORI MONTGOMERY: Well, for the moment, they are. But I don’t think — I mean, I think that the debate over the long-term deficit continues once we get past the debt ceiling.

JEFFREY BROWN: Yes.

LORI MONTGOMERY: I think the debt ceiling is force some kind of short-term deal that will, at the very least, get us an agreement on the 2012 budget, get us through next fall without shutting down the government anymore, that sets some kind of targets for spending over the five- to 10-year horizon and that produces a package of cuts that serves as a down payment towards those targets.

And the magnitude of those cuts could be a couple hundred billion. It could be more. It’s sort of unclear what the shape of that package will be.

JEFFREY BROWN: And let me ask you finally, briefly here, we mentioned that Sec. Geithner gave them — everybody a little bit more breathing room, right, but not a lot. He still had this very — this great sense of urgency.

So, where do things stand in terms of the possibility, the likelihood of coming up with — against that deadline?

LORI MONTGOMERY: Well, they have got some time. I mean, what are we? We’re in early May. We’re going to hit the debt limit in a couple of weeks. And Geithner has said that he can sort of juggle the books and keep paying the bills until early August without any trouble.

But, you know, the longer — once we hit the limit, and he starts to do those things that he can do, we begin to pay a price for that. And the markets — uncertainty begins to accumulate. And, in the past, we have paid more money for interest because of it. So, they can’t let this go on forever.

JEFFREY BROWN: All right, Lori Montgomery of The Washington Post, thanks for the update.

LORI MONTGOMERY: Thanks for having me.