After a two-and-a-half hour session on Thursday, June 9, Vice President Joe Biden’s bipartisan and bicameral group of six lawmakers agreed to meet three times next week to continue talks. The group negotiating a bipartisan deficit reduction plan spent much of Thursday’s meeting discussing revenues and listening to a presentation from Treasury Secretary Timothy Geithner on the role that tax expenditures and costly tax deductions and loopholes play in the budget shortfall.
The group reportedly hopes to have a framework for a macro-budget deal ready by July 4, but Congress will need much of July to negotiate the deal and to increase in the federal debt ceiling to avoid the August 2 government default deadline.
House Majority Leader Eric Cantor (R-VA) said “we had much substantive discussion today and look forward to more next week.” Or as House Budget Committee Ranking Member and another Biden talk participant Chris Van Hollen (D-MD) put it, “No ground given. No ground lost.”
In order to gain Republican cooperation to raise the debt ceiling by the $2.4 trillion needed to get through the rest of 2011 and all of 2012, the Biden group will need to reach agreement to cut at least $2.5 trillion from the budget, according to talk participant and House Minority Whip John Kyl (R-AZ) this week. Republican lawmakers have repeatedly pegged the size of the budget deal to the size of the debt ceiling increase and have opposed any tax increase as part of the deficit reduction plan.
Among the spending cuts reportedly agreed to so far by the Biden negotiating group is a $34 billion farm bill cut (over the next decade), assumed for purposes of coming up with the number to be achieved by completely eliminating commodity program direct payments. It is unclear if only the number has been agreed to, or if there is a policy or set of policies that have been agreed to for reaching the number.
Meanwhile, also this week, the Senate’s own Gang of Five shared a bit more about the deficit-cutting fiscal changes they have developed for their own budget plan. The gang — Saxby Chambliss (R-GA), Mark Warner (D-VA), Dick Durbin (D-IL), Kent Conrad (D-ND), Mike Crapo (D-ID) — now plans to cut $4.7 trillion from the deficit over the next decade. Previously they had quoted $4 trillion as their ten-year goal.
This week they held a briefing for 18 senators, more than any past meetings, to gauge the level of support for their plan. Their plan reportedly includes cuts to regular spending as well as to entitlement programs plus revenue increases. However, the group has no plans for when it will publicly reveal its plan, according to group members.
The Senate has not marked up a 2012 budget resolution or any 2012 appropriations bills, with action delayed until some type of bipartisan macro-budget deal is reached that will also allow the current debt ceiling to be lifted to avoid default and the economic crisis that would ensue. The stakes are high and time is short.