Democrats Fear Debt Deal with No Revenue Increases

Senate Democrats are fuming over concerns that the White House will agree to a debt deal without any offsetting revenue increases as negotiations are increasingly centered on private meetings between President Obama and House Speaker John Boehner, R-Ohio. Exiting a July 21 Democratic caucus meeting with White House Budget Director Jacob Lew, the lawmakers said they were frustrated with the Republicans’ refusal to consider some tax increases and wondered aloud if the president was leaning toward cutting a sweetheart deal with Boehner.

Senate Majority Leader Harry Reid, D-Nev., told reporters that any deal on the debt ceiling must contain revenue along with spending cuts. “There has to be some fairness to this. This can’t be all cuts, there has to be a balance,” said Reid. The senior lawmaker made his comments as rumors swirled that Boehner and Obama were nearing agreement on a major deal that would only include spending cuts with a promise to address revenue at a later date.

White House Press Secretary Jay Carney shot down news reports that the president and Boehner had reached a deal on a deficit-reduction plan, telling reporters at an early afternoon briefing there was “no progress to report.” White House negotiators continue to work toward getting the biggest deal possible, Carney said, and they believe that any significant deficit-reduction package must include revenue.

“The only issue under discussion and debate right now is what kind of deficit-reduction package can accompany a measure that would ensure that we do not, for the first time in our long history, default on our obligations,” Carney advised. A significant package, noted Carney, must include defense and non-defense discretionary spending cuts, entitlement reform and “savings through the tax code,” Carney said.

Senate Action

On the Senate floor, lawmakers turned to the House-approved, Cut, Cap, and Balance Bill of 2011 (HR 2560), which would amend the Constitution to require a balanced federal budget, with votes tentatively planned for either July 22 or 23. The measure is not expected to clear the Senate. There is also the possibility of the Senate turning to a backup plan worked out by Reid and Senate Minority Leader Mitch McConnell, R-Ky., to raise the debt ceiling as early as July 23 or 24 with votes the following week, but Senate leadership said it could not confirm the weekend schedule at this point.

By Jeff Carlson and Paula Cruickshank, CCH News Staff

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