President Obama and Vice President Biden will hold separate meetings on June 27 with Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., in an effort to revive deficit-reduction talks that ended abruptly on June 23 (TAXDAY, 2011/06/24, C.1). Biden cancelled the scheduled meeting after the two Republican members of the group, House Majority Leader Eric Cantor, R-Va., and Senate Minority Whip John Kyl, R-Ariz., said they would no longer participate in negotiations as long as tax increases remained on the table.
Late on June 23, Biden issued a written statement that the next phase of the deficit talks would be in the hands of House and Senate leaders who will determine the scope of an agreement to put the U.S. fiscal house in order. He repeated the president’s call for a “balanced approach” to deficit reduction that would cut domestic, defense and mandatory spending and close tax loopholes. “We remain confident that we can continue the progress that we’ve made, and that there’s reason to believe that we’ll be able to find common ground to achieve significant deficit reduction,” White House Press Secretary Jay Carney said at a press briefing on June 24.
Treasury Secretary Timothy F. Geithner, at a moderated question-and-answer session at Dartmouth College on June 24, predicted that the two sides will reach an agreement that will keep the U.S. from defaulting on its debt obligations on August 2. Geithner, a participant in the Biden-led talks, said to expect “a lot of political theater…in the next couple of weeks,” but ultimately, he noted, the leadership in Congress understands the devastating economic consequences of a government default. “We remain very confident that Congress will act responsibly and maintain the full faith and credit of the United States government by raising the debt ceiling,” Carney asserted.
By Paula Cruickshank, CCH News Staff