“The speaker told the group that he believes a package based on the work of the Biden group is the most viable option at this time for moving forward,’’ said a Boehner aide. “The speaker restated the fundamental principles that must be met for any increase in the debt limit: spending cuts and reforms that are greater than the amount of the increase, restraints on future spending, and no tax hikes.’’
The Biden approach has problems as well, and aides in both parties questioned whether it offers a realistic path to compromise. Negotiators were still struggling to meet the $2.4 trillion goal when the talks broke up over taxes. Aides in both parties said a consensus had formed around only about $1.5 trillion in savings.
Of that, a little more than $1 trillion came from agency budgets. The parties were hung up over Democratic demands for a “firewall” between domestic and military spending, which would guarantee that the Pentagon shares in the pain of any agency cuts, as well as Republican concerns that Democrats were offering minuscule reductions in 2012 and 2013.
The rest of the savings were split about evenly between health programs — primarily Medicare and Medicaid — and other direct-payment programs. Negotiators were also considering changes to Social Security, such as using a different measure of inflation that would have the effect of reducing payouts.
But absent GOP agreement on a Democratic request for as much as $400 billion in tax hikes on the wealthy and corporations, Democrats were reluctant to put the popular entitlement program on the table.
Without Social Security changes and tax increases, aides in both parties said, it had proved virtually impossible to push savings up to the Biden goal. Returning now to that framework may present not only problems of mathematics but political problems as well, said Ed Lorenzen, a budget analyst for the Obama fiscal commission who now works with the bipartisan Committee for a Responsible Federal Budget.
For example, Lorenzen said, farm state lawmakers may have been willing to absorb a big hit in a package that aims to solve the nation’s budget problems. But, he said, “it will be harder to sell deep ag cuts if the perception is that farm subsidies make up a disproportionate share of the smaller deal.”
Although his party and the White House appear far from an agreement, McConnell pledged Sunday to raise the federal debt limit in time to avert a default.
“Nobody is talking about not raising the debt ceiling. I haven’t heard that discussed by anybody,” McConnell said, adding that he would describe a “contingency plan” later this week if a deal isn’t reached.
Republican aides declined to discuss that plan, but McConnell has in recent weeks suggested that even the Biden framework is too ambitious and that lawmakers may need an alternative that cuts spending by a modest amount in exchange for a much shorter increase in the debt ceiling.
White House Chief of Staff William M. Daley and Geithner said on the Sunday talk shows that Obama remains committed to achieving the large deal he has outlined.
“He’s not someone to walk away from a tough fight. This is a very tough political fight, no question about it,” Daley said on ABC’s “This Week.” “But he didn’t come to this town to do little things. He came to do big things.”
Daley called Boehner’s abandonment of a broad deal “unfortunate,” adding that “everyone agrees that a number around $4 trillion is the number that will . . . make a serious dent on our deficit.”
Staff writers Zachary A. Goldfarb, Paul Kane and Dan Balz contributed to this report.
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