UPDATE @ 4:32 PM. Via The White House:
This evening at 9:00PM EDT, the President will address the nation from the White House on the stalemate in Washington over avoiding default and the best approach to cutting deficits.________________________
Eight days and counting. Still no debt deal in sight. But, there are plans being developed on both sides of Capitol Hill. And, the White House has weighed in.
Sam Stein has the details on the plan being developed by Harry Reid:
Senate Majority Leader Harry Reid's (D-Nev.) $2.7 trillion debt ceiling proposal will not include reforms to the benefit structure of entitlement programs, several Democratic sources confirmed on Monday.A fact sheet on Reid's bill can be viewed here.
The plan, which is being crafted as a last-minute attempt to break through the political impasse on a deficit reduction package, would instead lean heavily on cuts to discretionary spending. The package will also reportedly include roughly $1 trillion in savings that will come from the drawdown of the wars in Iraq and Afghanistan (which the Congressional Budget Office does score). Reid's office was notably hesitant to confirm that detail, cautioning reporters to wait until the final package is unveiled. That said, if entitlement programs remain more or less untouched in the plan, there would be few other areas from which to draw ten-year savings.
Word that Reid is taking entitlements of the table will come as welcomed news to Democrats who are still smarting from the idea that the party has gone from demanding a "clean" debt ceiling bill to willingly backing $2.7 trillion in cuts without measures to increase revenue. The Obama administration had offered to support an increase in Medicare's eligibility age, the means-testing of certain Medicare programs, cuts to Medicaid benefits and a restructuring of the payments of Social Security benefits as part of a grand bargain with Republicans. GOP leadership ultimately rejected that proposal over complaints that the president was insistent that additional tax revenues be added to the mix to round out the plan.
A short time ago, the White House issued a statement offering support for Reid's approach:
The President has been advocating a balanced plan that would reduce our deficit by $4 trillion by making large cuts in domestic and Pentagon spending, reforming entitlement programs, and closing tax loopholes for corporations, millionaires and billionaires. This sort of approach won support from Democrats and Republicans in the Senate, but the House Republicans walked away after insisting that the budget be balanced on the backs of seniors and the middle class.Meanwhile, House GOPers are finalizing a plan with a short-term deal, which Obama has already said he would reject (although the GOPers appear willing to test him on that -- a strategy that has worked well for them in the past.) They also create what's being dubbed a "Super Congress." But, as usual, everything depends on what the teabaggers want. From the NYT:
Now, faced with the “my way or the highway,” short-term approach of the House Republicans, Senator Reid has put forward a responsible compromise that cuts spending in a way that protects critical investments and does not harm the economic recovery. All the cuts put forward in this approach were previously agreed to by both parties through the process led by the Vice President. Senator Reid’s plan also reduces the deficit more than enough to meet the contrived dollar-for-dollar criteria called for by House Republicans, and, most importantly, it removes the cloud of a possible default from our economy through 2012. The plan would make a meaningful down payment in addressing our fiscal challenge, and we could continue to work together to build on it with a balanced approach to deficit reduction that includes additional spending reforms and closing tax loopholes for corporations, millionaires and billionaires.
Senator Reid’s plan is a reasonable approach that should receive the support of both parties, and we hope the House Republicans will agree to this plan so that America can avoid defaulting on our obligations for the first time in our history. The ball is in their court.
House Republicans intend to push for a vote this week on a two-step plan that would allow the federal debt limit to immediately rise by about $1 trillion and tie a second increase next year to the ability of a new joint Congressional committee to produce more deficit reduction.So, it comes down to the GOP rank-and-file. That's never good for the country.
Top Republicans were to try to sell the proposal to their rank-and file in a crucial meeting Monday afternoon as House Republicans and Senate Democrats readied competing plans in an effort avoid a federal default next week.
The proposal would cut current spending and put legal limits on future spending, saving what Republicans estimate to be about $1.2 trillion over 10 years. The plan calls for no new revenue.
