The Senate majority leader says budget reductions must be accompanied by tax reform. He predicts that negotiations on the nation’s debt limit will drag until the 11th hour.
Lisa Mascaro
Los Angeles Times
5/19/2011
Battle lines in federal debt talks sharpened markedly Thursday when the Senate’s top Democrat rejected a proposal for $2 trillion in budget cuts as demanded by House Speaker John A. Boehner, saying any cuts must be accompanied by action on closing tax loopholes.
“You can’t do $2 trillion just in cuts,” Senate Majority Leader Harry Reid (D-Nev.) said in an interview in his Capitol office. “There has to be a mix of spending cuts, including defense. There has to be a more fair apportionment of tax policy in this country.”
Republicans have resisted using tax reform to rein in deficits as Congress and the White House try to break a stalemate over raising the nation’s debt limit by Aug. 2 to avoid a first-ever federal default. Boehner’s office reiterated Thursday that tax hikes would not be “on the table” in talks.
Reid said negotiations are likely to drag until the 11th hour, a prospect certain to send shudders through the financial markets and fuel political debate.
Reid’s comments came as budget talks unfold on various fronts across Washington. Both Democrats and Republicans are seeking a political advantage, especially among independent voters that can swing elections.
You can read more about the political game of “chicken” at the LA Times.
Related: GOP senator drops out of deficit negotiations
…Sen. Tom Coburn of Oklahoma said talks had hit an impasse. The group had met for several hours late Monday, but Coburn ran into resistance when he proposed making cuts to Medicare that were considered unacceptable, said sources close to the talks.
Losing the conservative lawmaker is a blow to the group of six senators that many in Washington had hoped could bridge the divide between Democrats and Republicans to reduce the country’s alarming national debt…
…The setback shifts attention to the closed-door negotiations being led by Vice President Joe Biden and congressional leaders to reach agreement on budget cuts. Treasury officials have said the nation will default on obligations if its borrowing capacity is not increased by Aug. 2…
