“The risks, the costs, the disruptions and the incalculable damage lead me to but one conclusion: The Senate must pass this legislation before the Congress adjourns,” the letter says. Carney added: “We agree with Ronald Reagan and many others that we cannot default.”
Meanwhile, debt-reduction talks between the White House and congressional leaders are underway, led by Vice President Biden. Last week, Biden said the group is on track to produce an agreement that would trim at least $1 trillion from projected budget deficits over the next 10 to 12 years. That would be the biggest debt-reduction package since at least the start of the Clinton administration, when a Democratic Congress approved spending cuts and tax increases estimated to reduce deficits by $433 billion over five years.
This time around, negotiators have agreed to consider pulling about $200 billion in savings from various programs, including federal worker pensions and farm subsidies. They are also eyeing the nearly $800 billion that Obama has offered to cut from domestic agencies over the next 12 years.
Beyond that, their work gets much tougher. Biden said the White House will insist on new tax revenues, despite the adamant opposition of Republicans. And Republicans are demanding significant cuts to Medicare, the biggest driver of future borrowing, despite stiff resistance from Democrats.
Democratic leaders not only want to protect health benefits for seniors but also are eager to capitalize politically on an unpopular GOP proposal to replace Medicare with private insurance subsidized by the federal government.
The GOP’s Medicare plan was a key factor in a Democratic victory last week in a special election in a conservative House district outside Buffalo, and Democrats are worried that a White House deal to cut Medicare spending could spoil a ripe opportunity for them to gain ground on Republicans.
With Obama set to host House Democrats at the White House later this week, Hoyer fired a warning shot Tuesday, cautioning the president not to forge any agreements with Republicans without input from his caucus.
“We are expecting to be full participants in any of the decisions that are made with reference to what we will or will not support as Democrats,” Hoyer told reporters. “We want to see our Medicare system strengthened, not eliminated.”
Staff writer Felicia Sonmez contributed to this report.