Obama, Congress Search for Grand Bargain on Debt Ceiling

BY David Chalian  July 7, 2011 at 8:49 AM EDT

President Obama

On Thursday, House and Senate leaders will meet with President Obama at the White House. Photo by Mandel Ngan/AFP/Getty Images.

The Morning Line

At his news conference last week, President Obama called on members of Congress to “do something big” when it comes to raising the country’s debt ceiling. It appears he plans to hammer home the point with top House and Senate lawmakers when they arrive at the White House Thursday morning.

The president will reportedly call on congressional leaders to embrace a broad deficit reduction plan with significant changes to Medicare and Social Security.

The Washington Post’s Lori Montgomery has the details:

“As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.”

POLITICO’s David Rogers lays out the numbers:

“Rather than $2.4 trillion in deficit reduction, the administration is aiming higher toward as much as $4 trillion over 10 years, and this increases the likelihood that some commitment to tax reform must be part of the mix, in hopes of lifting the economy and generating revenues for the future.”

Carl Hulse and Mark Landler of the New York Times, meanwhile, look at where Republican leaders might be willing to give on taxes:

“Officials said Mr. Boehner suggested that he was open to the possibility of $1 trillion or more in new revenue that would be generated by addressing tax issues already raised in the talks, like killing breaks for the oil and gas industry, eliminating ethanol subsidies and ending preferential treatment for corporate jets.

“But those changes would fall far short of the revenue goal, and the source of the rest of the money would, under what they described as Mr. Boehner’s proposal, be decided by Congress through a review of tax law changes. One official said some revenue could be generated by allowing Bush-era tax cuts for affluent Americans to expire at the end of 2012, which would produce hundreds of billions of dollars, though those savings would be offset by the costs of retaining lower rates for those below the income threshold.”

House Majority Leader Eric Cantor, R-Va., one of the eight lawmakers who will participate in the White House meeting, told MSNBC’s “Morning Joe” Thursday that Republicans support reforming the tax code, but said members of his party were “united” in their belief that “now is not the time to raise taxes.”

Rep. Cantor also reaffirmed his willingness to look at closing tax loopholes, including for corporate jet owners, one of the president’s main targets in the budget fight. But, he said, Republicans would demand that any savings be offset with tax cuts somewhere else.

“That money doesn’t come out of thin air,” he asserted.

Rep. Cantor’s loophole talk, paired with comments Wednesday from Senate Minority Leader Mitch McConnell, R-Ky., that he was also open to broad tax reform, gave the appearance that Republicans were somehow backing off an entrenched position in advance of Thursday’s session.

While the rhetoric certainly may have been softer, a major shift in policy it was not. Both Sen. McConnell and Rep. Cantor have been on the record in support of revising the tax code.

“Any effort to simplify the tax code, to get the rates down, to make it more fair, I think we’d be open to discussing that,” Sen. McConnell told reporters on Capitol Hill in January, long before the debt ceiling debate.

Leaders of both parties agree that the debt ceiling must be raised. By showing a willingness to compromise the two sides are hoping to shield themselves from the political fallout if a deal fails to materialize in time. That rhetoric will need to be matched by actual policy shifts, however, if negotiators are going to come to an agreement and avoid the real economic consequences of not lifting the debt limit.

PAWLENTY CO-CHAIRMAN APOLOGIZES

Well, that didn’t take too long.

Within a few hours of The Hill posting an interview Wednesday with Tim Pawlenty’s campaign co-chairman, who said part of Rep. Michele Bachmann’s success is that she has “a little sex appeal,” Pawlenty’s campaign distributed a statement of apology and regret from former congressman Vin Weber and Pawlenty made his displeasure known to reporters trailing him in Iowa.

“She’s got hometown appeal, she’s got ideological appeal, and, I hate to say it, but she’s got a little sex appeal too,” Weber told The Hill.

Within four hours, a statement of apology emerged from Weber.

“I made a mistake that was disrespectful to my friend, Congresswoman Bachmann,” he said. “I was not speaking on behalf of Gov. Pawlenty’s campaign, but nevertheless, it was inappropriate and I’m sorry.”

The New York Times’ Jeff Zeleny reports that Pawlenty addressed the topic after a campaign event in Iowa Wednesday evening.

“‘I don’t believe that he or anyone else should be using as a reference somebody’s sex appeal to judge their fitness for office or the strength of their campaign,’ Mr. Pawlenty told reporters Wednesday evening. ‘It was a wrong statement. He should not have been making that reference.’”

The Bachmann campaign’s refusal to comment on Weber’s remark or send out surrogates to stoke the flame is yet another example of the successful discipline the campaign and the candidate have employed in the past three-and-a-half weeks.

On Thursday, Team Bachmann is going up with a statewide television buy for its first ad of the campaign. It’s part biographical (the Waterloo roots, parent of five, foster parent, tax attorney) and part conservative credentials (voted against the bailout and the stimulus).

At the close of the 30-second spot, the Minnesota congresswoman adds, “I will not vote to increase the debt ceiling.”

Clearly, Bachmann’s campaign would rather have the focus on this new ad and not on a cable TV, circus-style to and fro about gender politics.

IF, AT FIRST, YOU DON’T SUCCEED. . .

Iraq War veteran Tammy Duckworth is making another run for Congress. Duckworth, who until recently served as an assistant secretary in the U.S. Department of Veterans Affairs, was one of Rahm Emanuel’s high profile recruits when he headed up the Democratic Congressional Campaign Committee in 2006, when the party won a majority in Congress riding an anti-Iraq/anti-Bush wave.

However, Duckworth came up short in that election against Republican Peter Roskam, who is serving his third term representing the 6th Congressional District of Illinois.

Now that the Illinois legislature has redrawn its congressional maps based on the 2010 Census numbers, the new 8th Congressional District has gotten more Democratic. Which means Republican freshman Rep. Joe Walsh may need to find a more hospitable district from which to run.

Duckworth won’t have a glide path to the nomination, however. Democrat Raja Krishnamoorthi is already in the race and raising money.

For more coverage, be sure to check out the reporting from the Chicago Sun Times and the Chicago Tribune.

For more political coverage, visit our politics page.

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