July 12th, 2011
01:39 PM ET
Washington (CNN) - The two sides seem as far apart as ever as they try to reach a deal to raise the debt ceiling. All of the negotiators agree they don't want to see the U.S. default, but how they get to any agreement is unclear.
After the second meeting in as many days among the principal negotiators, congressional leaders were tasked with talking to their members, crunching some numbers and coming back with new ideas about how to bridge their differences and reach at least $600 billion more in budget savings - the approximate amount in deficit reduction needed to get a hike in the debt ceiling approved in Congress, multiple officials familiar with the ongoing talks tell CNN. Republicans have said they would only consider a debt hike if a bigger amount in budget savings was attached.
Since the idea of a grand deal was abandoned over the weekend, the leaders have gone back to the outlines of negotiations chaired by Vice President Biden, which lasted just under two months, as they try to craft a deal before August 2nd. But those Biden-led talks ended up breaking down at the end of June over the same issues that killed the later sessions involving the President and Speaker John Boehner in trying to craft a major deficit reduction package - how much to cut in entitlements and the White House insistence some revenue increases be part of any package.
So when the congressional leaders come back to the White House Tuesday afternoon will they bring with them fresh proposals - or will the same old ones and their philosophical differences simply be re-hashed?
Republicans are pushing for an agreement that would include $2.4 trillion of savings over a decade, which would be tied to an increase in the debt ceiling through 2012. There is great political benefit in that: both parties would not have to vote on this tricky issue again before next year's election.
In Monday's session, according to Democratic sources familiar with the talks, House Majority Leader Eric Cantor laid out about $1.7-1.8 trillion cuts in cuts previously identified during the Biden-led talks: $1.1 trillion in cuts in so-called discretionary spending - the part of the budget funding non-defense, non-entitlement programs; $200 billion in spending in mandated programs - such as civilian and military retirement, farm subsidies; $200 billion in mandatory health programs such as Medicare. Those savings would equal about $1.5 billion, and it is believed will generate about $200-300 billion in savings through less interest payments on the deficit. Complicating the formula, Democrats aren't convinced they can pass a package that includes those cuts.
At one point in Monday's meeting some of the Republicans were saying that ending oil and gas tax and other subsidies would kill jobs. The Vice President, according to Democratic sources familiar with the meeting, said "C'mon guys, let's get real" arguing this is an ideological, not an economic position and saying ending such items would not kill jobs.
Republicans have consistently opposed in these meetings any type of revenue increase - whether it would be closing loopholes or the more drastic ending of the Bush-era tax cuts on the wealthy - arguing it would hurt the economy.
In the previous talks between the President and Speaker Boehner, when they were aiming for a major deficit reduction deal of $4 trillion over a decade, Mr. Obama did discuss raising the Medicare eligibility age from 65 to 67 as part of a larger package of entitlement cuts and new revenue, Democratic sources familiar with the discussions confirmed. However, it was only a proposal discussed the sources emphasized as part of a larger deal which was never reached.
When the President on Monday invited the leaders back to the White House for a meeting Tuesday at 3:45, Senate Majority Leader Harry Reid asked "am or pm?" according to Democratic sources familiar with the meeting.
The President, according to these sources, said "we might get to that."
CNN Senior Producer Kevin Bohn contributed to this story.
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