Obama Warms Up to House Republicans With No Deal Progress

President Barack Obama’s first meeting with the House Republican conference in three years produced no agreements in his quest for a deal on debt reduction amid skepticism from lawmakers about his intentions.

The Republicans, including House Speaker John Boehner, spoke of a frank and positive tone among the president and members of their caucus. Still, they voiced disappointment over Obama’s opposition to their plan to balance the U.S. budget in a decade and his insistence on another tax increase as the price for overhauling entitlement programs such as Medicare.

Before addressing the nation’s long-term debt, Obama is “going to hold hostage the fact that he wants to raise taxes on the American people again. It’s not going to get us very far,” Boehner told reporters after yesterday’s meeting at the Capitol.

Lawmakers still smarting from Obama’s campaign-style attacks on Republicans when he sought to pressure Congress to avert automatic spending cuts that took effect March 1 questioned whether he was sincere in seeking common ground on spending, taxes and entitlement programs. The distance between Democrats and Republicans over budgetary plans for 2014 offers no sign of an accord before the U.S. again reaches the debt limit reached in mid-May.

‘Trust Factor’

Representative Greg Walden, an Oregon Republican, told reporters as he left the meeting that Obama has to overcome a “trust factor” with Republicans. “It was disappointing to hear he doesn’t believe we need to balance the budget in a 10-year time frame,” he said.

Obama’s revived talks with lawmakers aren’t expected to affect immediate spending and budget decisions. He’s scheduled to meet with House Democrats and Senate Republicans today.

The president’s outreach to Congress coincides with a Senate vote this week on a stopgap spending measure to fund the government through Sept. 30 and avert a government shutdown after current funding expires March 27. The legislation, as well as a House-passed bill, leaves in place $85 billion in automatic spending cuts, known as sequestration.

“The tone of the meeting, both from the president and from our members, was very respectful. There was a candid, frank conversation, but I thought the tone was very good,” Boehner, an Ohio Republican, said when asked what most encouraged him about the meeting.

Still, Republican lawmakers said the meeting emphasized how far apart the parties are on tax increases and spending.

Entitlement Programs

Obama told rank-and-file Republicans that he doesn’t support balancing the budget over 10 years though he wants to find common ground on revamping the tax code. He also signaled a willingness to look at changes to entitlement programs, including Social Security (USBOSOCS), according to lawmakers who described yesterday’s session, which lasted a little more than an hour.

Republicans “hear a lot of lip service” yet “we really don’t know what we can trust,” said South Dakota Republican Kristi Noem.

The president told House Republicans “he doesn’t want to balance the budget in 10 years and he wants a tax increase and he wants new spending,” California Representative Darrell Issa told reporters. “Other than that, we’re close.”

New York Republican Michael Grimm, who described the conversation with the president as “constructive,” told reporters “there was definitely an undertone of Republicans being skeptical that the president looks at everything through a political optic” and tries to “gain an advantage for 2014.”

Obama’s ‘Pushback’

“There was pushback there,” Grimm said. “The president made it very clear that’s not his agenda at all.”

Grimm said he left the meeting with the impression that Obama and House Republicans could find common ground on “overall tax reform” and a rewrite of immigration law.

Virginia Republican Randy Forbes said the meeting with Obama was “a great first step to begin to have these kinds of dialogues. It wasn’t the purpose to have a love-fest, the purpose was to say how do we put facts on the table and how do we deal with facts.”

Obama told Republicans that he would support a change in the way cost-of-living increases are calculated for Social Security and other entitlements as well as means-testing Medicare benefits, Noem said in an interview.

Cost-of-Living

Still, Obama said he’d be willing to consider entitlement program changes only with revenue increases as part of a broader budget deal, according to Representative Kevin Brady, a Texas Republican.

House Democratic Leader Nancy Pelosi said today before meeting with Obama that she would “take a look at” changing the formula for calculating entitlement cost-of-living adjustments “if we can determine it doesn’t hurt the poor and the very old.”

Pelosi of California said she opposes raising the eligibility age for Medicare because it doesn’t save money.

“Raising the age is just trophy take” for Republicans, she told reporters today. Democrats “created it” as a “pillar” of American society and “are there to protect it for our seniors.”

The chief budget writers in the House and Senate have offered competing spending blueprints for 2014. The president’s challenge is whether to strike a compromise or side with Democrats as he pushes for a deficit-reduction plan.

Senate Budget

The Senate budget blueprint laid out by Patty Murray, a Washington Democrat, would generate almost $1 trillion in new revenue while protecting Medicare and expanding Medicaid health coverage for more low-income Americans. House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, earlier this week proposed a plan for balancing the government’s books in 10 years by cutting $4.6 trillion.

While Obama met with House Republicans, the Senate Budget Committee began considering Murray’s proposal, which calls for about $975 billion each in tax increases, mostly for top earners and corporations, and in spending cuts. The spending reductions include a projected $240 billion in interest payments on debt.

Murray’s plan includes $100 billion in economic stimulus and calls for a fast-track process to increase taxes for top earners and large corporations that would bypass the 60-vote supermajority for a Senate floor vote. The Budget Committee is scheduled to approve the plan today, and Senate Majority Leader Harry Reid, a Nevada Democrat, said yesterday he plans to take it to the floor next week.

The Senate also began considering amendments to a House-passed proposal to fund the government through Sept. 30.

Spending Cuts

Senate Democratic leaders are looking to give the Agriculture, Homeland Security, Commerce and Justice departments as well as science programs flexibility to execute across-the-board spending cuts that took effect March 1. The House-passed bill gives that leeway to the Defense and Veterans Affairs departments.

Reid has said he wants to complete action on the measure this week and it could go to the House for a final vote next week.

On the broader budget talks, one difference between the Republican and Democratic approaches centers on how each would allocate added revenue coming from curbs on tax exemptions.

Ryan’s plan would use new revenue to lower rates for individuals and corporations as part of a rewrite of the U.S. tax code. Murray’s plan would apply savings from ending tax breaks toward $1.85 trillion in deficit reduction over a decade.

Ryan’s budget also contains elements that Democrats are committed to opposing: repeal of the 2010 health-care law, which is set to take full effect next year, and partial privatization of Medicare by allowing Americans now younger than 55 to buy private insurance with a government subsidy.

Obama addressed the Republican conference at the party’s retreat in January 2010. After that the president also invited a contingent of Republicans to the White House in June 2011.

To contact the reporters on this story: Roxana Tiron in Washington at rtiron@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.