With a debt ceiling deadline less than two weeks away, President Obama and House Speaker John Boehner are in talks to raise the nation’s borrowing limit in exchange for making $3 trillion in spending cuts, though the two sides are denying any final agreement is imminent.
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“Totally false,” one GOP aide proclaimed after hearing reports of the deal.
But news of the potential compromise, spread Thursday afternoon by anonymous Senate Democratic aides, caused a flurry of anger among Senate Democrats, who learned that it could include big cuts but no immediate tax increases.
Democratic leaders met privately with Obama and grilled him on the rumors, with lawmakers telling Obama he could lose their support on a deal that is brokered with Boehner behind their backs. The White House was publicly discouraging talk that a deal was close. “There is no deal … we are not close to a deal,” White House press secretary Jay Carney said Thursday afternoon.
The rumored agreement also caused anger among fiscally conservative Republicans, who have been holding out for a much bigger spending cut and as well as balanced-budget amendment that make up their “Cut, Cap and Balance” legislation that passed the House on Wednesday.
Boehner, R-Ohio, immediately denied reports of an imminent $3 trillion deal and made an appearance on Rush Limbaugh’s radio show to further shoot it down.
But Boehner also signaled the two sides are working on some kind of compromise.
“We talked about fallback options if in fact Cut, Cap and Balance does go down,” Boehner said on the radio show. “And I do think it’s our obligation to have a fallback plan if that doesn’t work.”
The Senate is expected on Friday to defeat the Cut, Cap and Balance bill, which would cut spending by $111 billion and require a balanced-budget amendment to raise the debt ceiling.
Once the bill fails, the two sides are likely to begin working on a compromise deal.
On Friday, Boehner is expected to meet privately with House Republicans to try to convince many of the more conservative rank-and-file members that they debt ceiling should be raised by an Aug. 2 deadline set by the Treasury secretary.
A few dozen House Republicans met privately Thursday afternoon with the credit rating agencies in a meeting orchestrated by the GOP leadership as part of their effort to show members who are reluctant to raise the debt ceiling that such a move would be dangerous to the economy because the nation’s credit rating would face a certain downgrade.
“They are also saying just simply raising the debt limit is not sufficient, we could still face a downgrade unless we come forward with a credible plan,” to reduce the deficit, Rep. Charles Boustany, R-La., said following the meeting with creditors. “Not necessarily solving the problem overnight but there needs to be a credible plan going forward that convinces the rating agencies that we are serious about this.”
Republicans are considering a plan that would increase the debt ceiling for several months at a cost of about $500 billion, which would give them time to come up with a longer, comprehensive plan to cut spending, reform the tax code and tackle entitlements, some Republicans said.
