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Posted at 03:27 PM ET, 07/01/2011

Deadline tightens for Congress, White House on debt limit


(Bloomberg)
Can Congress and the White House reach a debt-limit deal by July 22?

That’s the new date by which the Obama administration now says there must be an agreement in order to give Congress time for legislative action before its final Aug. 2 deadline.

The rhetoric surrounding the debt-limit battle has shifted 180 degrees over the past week – from a surprisingly cooperative tone to finger-pointing and gamesmanship, heightened by President Obama’s harsh criticism of Republicans at a press conference on Wednesday. But little substantive change has happened in the week since House Majority Leader Eric Cantor (R-Va.) pulled out of the talks over an impasse with Democrats on tax increases.

That means that when the Senate returns next Tuesday – followed by the House on Wednesday – the parties will have less than three weeks to arrive at an agreement on a sweeping deficit-reduction plan.

On Friday, Sen. Charles Schumer (D-N.Y.) said that the White House acted shrewdly in setting a target date ahead of the final deadline.

“The White House, I think, is being very wise and careful,” Schumer said in a conference call with reporters. “They said that we should not step to the edge of the cliff because we might fall off. So I think that setting a date ahead of the August 2 date makes sense.”

Throughout the two-month-long debate, Aug. 2 has loomed as the drop-dead date by which Treasury Secretary Tim Geithner has said Congress must vote to raise the federal borrowing limit or else the country will default.

But administration officials said Thursday that in order to give lawmakers time to approve the legislation – as well as to allow the nonpartisan Congressional Budget Office to score it – the deal will actually need to be worked out 11 days before then.

The scope of the spending package is also likely to shrink. The original goal of all parties – a deal that would make $4 trillion in budget savings over the next decade – now appears a distant possibility. The co-chairmen of Obama’s fiscal commission this week suggested that a $2 trillion deal may be the most realistic option for the short term, followed by further negotiations aimed at achieving the full $4 trillion down the road.

The congressional timeline over the next few weeks poses problems of its own. The Senate is slated to be in session for all of July, having canceled its planned recess next week to stay in town.

The House will be in session the first two weeks of July but is slated to recess the week of July 17 – the same week as the new deadline. Cantor spokesman Brad Dayspring said Friday that the House might cancel that recess if needed.

“Leader Cantor and [Sen. John Kyl (R-Ariz.)] identified over $2 trillion in spending cuts during negotiations with Vice President Biden over the last two months that could serve as the blueprint for a potential agreement,” Dayspring said. “The disagreement remains over the hundreds of billions of dollars in tax hikes that Democrats are trying to impose on individuals, small businesses, and employers. As always, the House will be here if and when needed, including the week of July 18.”

The July 22 date could also complicate the House’s planned vote on a balanced-budget amendment. The vote is aimed at hammering home House Republicans’ message that big changes are in order if the country is to tackle its soaring debt. If a final deal is met before the amendment vote, it could lose some of its intended force.

Despite the tight deadline, Schumer appeared optimistic Friday that congressional negotiators and the White House will be able to finalize a plan by the new deadline. But he also pointed the finger back at Republicans, arguing that the GOP must signal a willingness to include tax increases in a deal.

“The Biden meetings made significant progress, and there are hundreds of billions of cuts in programs that, frankly, many on our side of the aisle like, that we’re willing to make for the good of getting the debt problem in order,” Schumer said. “Our problem has been intransigence on the Republican side ... and to say that there should be no revenues makes no sense.”

Also on Friday, Sen. Jeff Sessions (Ala.), the top Republican on the Senate Budget Committee, announced that he would introduce a bill next week that would require any debt limit increase to be made public seven days before being voted on. The bill is aimed at countering a last-minute deal such as the one forged by Congress in April two hours before a looming federal government shutdown.

“This is the minimum time needed to address such an important matter,” Sessions said in a statement. “We shouldn’t have to pass the bill so that you can find out what is in it.”

By  |  03:27 PM ET, 07/01/2011

 
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