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Laying down blunt budget markers for debt crisis

By Jim Kuhnhenn

Associated Press

Published: Tuesday, May 10 2011 5:48 p.m. MDT

Democrats such as Rep. Steny Hoyer of Maryland, the party's House whip, portrayed Boehner as a captive of the Republicans' conservative base. And several Senate Democrats introduced legislation to strip highly profitable oil companies of tax breaks that give them $2 billion a year and use the money to make at least a small dent in the federal deficit.

Senate Finance Committee Chairman Max Baucus, one of the lawmakers negotiating with Biden, plans a hearing Thursday with top oil and gas industry executives on the tax breaks. But that idea is unlikely to go anywhere, since Republicans and oil state Democrats would be likely to filibuster it to death.

Boehner's office cast the end of such tax breaks as equivalent to a tax increase that would be felt at the gasoline pump.

"Making that a precondition for budget talks is . well, batty," Boehner spokesman Brendan Buck said.

The White House tried not to get drawn into the contretemps. "Maximalist positions do not produce compromise," White House spokesman Jay Carney told reporters.

"We understand that there are starting positions," he said. "We also understand that compromise involves acknowledging that you have to move off of your starting position."

Carney was armed with past quotes from Boehner in which the speaker declared that not raising the debt ceiling, thus prompting the U.S. to default on its debts, could mean disaster for the world's economy.

The last increase in the debt ceiling was in February of last year, from $12.4 trillion to $14.3 trillion. Under Boehner's proposal, that would mean that a similar increase this year would have to include about $2 trillion or more in spending cuts, an unprecedented reduction in spending.

Such cuts would require lawmakers to deal with spending in the government's biggest benefit programs, such as a Medicare and Medicaid. But Cantor and other top Republicans appeared to concede last week that overhauling those programs would be virtually impossible before the 2012 presidential and congressional elections.

A Republican budget plan passed by the House last month would change Medicare, the health care program for older adults, from direct government payments for medical bills to a voucher-like system. The change would affect future beneficiaries who are now 54 years old or younger.

Without Medicare or Medicaid on the negotiating table, the list of budget items facing trims is far more limited. The House Republican budget lists about $715 billion in non-Medicare and non-Medicaid cuts. They include spending reductions in farm subsidies, food stamps and changes in mortgage finance programs.

Associated Press writers David Espo, Jim Abrams and Stephen Ohlemacher contributed to this report.

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