Democrats, White House Said to Back $20 Billion of Additional Budget Cuts
March 28 (Bloomberg) -- U.S. Senator Richard Durbin of Illinois, the chamber's No. 2 Democrat, talks about a proposed Federal Reserve rule that would cap debit-card “swipe” fees. Durbin, speaking with Betty Liu on Bloomberg Television's "In the Loop," also comments on military operations in Libya and prospects for the U.S. budget and reducing the deficit. (Source: Bloomberg)
Democrats and the White House are prepared to offer congressional Republicans an additional $20 billion in cuts to help reach a deal on a 2011 budget, according to three people familiar with the negotiations.
The offer, on top of $10 billion in spending reductions already approved by Congress, would make up about half of the $61 billion Republicans want to cut by Sept. 30, when the spending year ends.
The $20 billion offer is aimed at moving budget negotiations forward to avert a government shutdown on April 8, when temporary spending authority expires.
The White House is working with Senate and House Democrats to determine what areas of the budget would be cut. The offer represents a deeper reduction than the Obama administration wanted, said one of the two people who spoke on condition of anonymity.
Obama has appointed Vice President Joe Biden, budget director Jacob Lew and chief of staff William Daley to prod talks toward an agreement, though there’s been criticism that Obama himself hasn’t personally gotten involved in the talks.
“We need to” reach an agreement by April 8, Senator Dick Durbin of Illinois, the chamber’s second-ranking Democrat, said on Bloomberg Television today. “The president needs to be at the table.”
Durbin said “we have two weeks to get serious,” and urged negotiators to find savings from areas other than education, research and investments.
Short-Term Measures
House Majority Leader Eric Cantor, a Virginia Republican, said March 25 that the two sides were far apart on a spending plan for this year. The stalemate has resulted in a series of short-term spending measures including the one expiring April 8.
The Republican-led House last month approved cutting government spending by $61 billion through Sept. 30, which would kill more than 100 programs and reduce hundreds more. So far, the Democratic-led Senate has gone along with about $10 billion in cuts.
Two of the people familiar with the offer for another $20 billion in cuts said formal negotiations stalled after a March 22 meeting among White House officials and aides to House Speaker John Boehner, an Ohio Republican, and Senate Majority Leader Harry Reid, a Nevada Democrat.
Appropriations Aide
A House Appropriations Committee aide at that meeting insisted on using as a starting point the House plan with $61 billion in cuts, one of the people familiar with the talks said. White House and Senate Democratic aides had been operating under the notion that House Republicans could accept about $32 billion in reductions, and the meeting broke off, the person said.
Democrats haven’t shown Republicans the $20 billion offer and aren’t sure when the next meeting will occur, the person said.
Durbin said today on MSNBC’s “Morning Joe” that including cuts in Social Security could threaten any chances of approval for a longer-term plan to curb the federal debt. Durbin, one of a bipartisan group of six senators trying to craft a long-range budget-cutting plan, said trimming the program for the elderly would make it harder to gain enough Democratic votes to get a proposal through the Senate.
Reid, a Nevada Democrat, and Senator Charles Schumer of New York, the chamber’s third-ranking Democrat, have said they oppose including Social Security cuts in any deficit-reduction plan.
‘Haven’t Given Up’
Durbin said he still believes Social Security should be part of a deal, saying, “I haven’t given up” on including either Social Security changes or tax increases, which are opposed by some Republicans.
Reid participated in a rally today with other Democratic senators and outside groups aimed at opposing efforts to alter the Social Security system. It’s an “outright lie” to say that Social Security is “headed toward bankruptcy,” Reid said.
“Let’s worry about Social Security when it’s a problem,” he said. “Today it’s not a problem.”
To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net Laura Litvan in Washington at or llitvan@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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