White House, Congressional Leaders Continue Debt Limit and Deficit Reduction Negotiations

The White House and congressional leaders continue to meet behind closed doors to negotiate the debt limit and deficit reductions.  Republicans and Democrats have not reached an agreement on a number of issues; however, both sides believed the meeting held on July 7, was a positive starting point.  Both sides are being tight-lipped about the talks, including Speaker John Boehner (R-Ohio), who held a closed-door meeting with the House Republican Conference.  Speaker Boehner told his colleagues he would not discuss the meetings, but reaffirmed his commitment to keep tax hikes “off the table.”   House and Senate leaders will continue to work through the weekend and meet with the President again on Sunday to further negotiations. A deal needs to be reached by August 2, which is when the Department of Treasury says the U.S. will default on its loans.  President Obama has softened his stance on changes to Social Security over the last few weeks in an effort to reach an agreement with Republicans.  The President is considering options to cut as much as $4 trillion in government spending over the next 10 to 12 years, including changes to Medicare and Social Security. In return, he is insisting Republicans agree to revenue increases.  Publicly, Republican leaders have held firm on not supporting any tax increases.  Speaker Boehner reportedly did acknowledge that revenue increases could be part of an agreement, but not tax increases.  It is unclear what those revenue increases would be, but it does not appear at this point closing gas and oil tax breaks or other loopholes is on the table for Republicans. Even if a deal is reached, congressional Republicans and Democrats must sell the package to their rank-and-file members who will determine its fate when they vote on a final package. For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org.