Deficit reduction deadline looming
July 7th, 2011
10:33 AM ET

Deficit reduction deadline looming

Washington (CNN) - The President and Speaker Boehner have discussed a potential compromise that includes broad tax reform and entitlement reform, putting all three entitlement programs (Social Security, Medicare and Medicaid) on the table, according to a Republican source familiar with negotiations.

The tax reform proposal discussed is to reduce the individual and corporate rates and simplify the tax code, eliminating deductions/credits/loopholes that corporations and individuals currently use to vastly reduce what they pay in taxes.  This broad reform might appeal to Republican critics like Sen. Minority Leader Mitch McConnell who warned against “cherry-picking” certain tax loopholes to close instead of dealing with them separately as part of a comprehensive approach to tax reform.

The Republican source also stresses there has been no offer, no deal and this is just a discussion between the President and Speaker, and does not expect any agreement to come out of talks today.

The obvious question remains: how could a compromise on all of these things possibly get done in the next few weeks?  It can’t, according to the source who says the specifics of entitlement reform could be struck before the August 2nd deadline but full-blown tax reform would take more time.  The sides could agree to a deadline for reaching an agreement on tax reform after August 2nd.

This Republican source tells CNN a mechanism could be inserted in the agreement whereby if Democrats and Republicans don’t come to a deal in the time specified, then the Treasury Department would have the authority to intervene in such a way that it is distasteful to both Democrats and Republicans, enough to incentivize them to strike a deal.

Next entry »
« Previous entry
soundoff (4 Responses)
  1. Jack of all trades

    Here is a promise that both the democrats and republicans should remember.
    If you agree to reduce Social Security and Medicare benefits. YOUR GOING TO BE VOTED OUT OF OFFICE.

    Hey Obama if you cut Social Security and Medicare. You promised change and you delivered NOTHING.


    July 7, 2011 at 11:42 am |
    • AWMessenger

      This is EXACTLY why OBAMA chose Social Security. He could have easily picked Medicaid and Welfare programs to cut, but he is playing CHESS. Do you think the GOP is going to agree to cut social security? The ONE entitlement program we have ALL been paying into our entire lives? The ONE entitlement program that is independently funded. Face it, OBAMA is the definition of EVIL. He won't be at peace until the US is totally bankrupt (like Greece). Welcome to our nightmare on Pennsylvania Avenue.

      July 8, 2011 at 10:12 am |
  2. Teresa Knox

    The rich,(which includes most career politicians) has not created enough american jobs to justify the extremely low taxes they now enjoy. My parents worked in textiles most of their lives, then in the eighties their jobs were gone with their retirement. Now ALL they have is social security and medicare. I am disabled and also rely on these entitlements. To abolish medicare and make deep cuts in social security is just not fair nor is it anything moral person would do to another. I think the rich have made enough money off the sweat and blood of the workers and voters to pay some taxes! As for career politicians, they should remember there are more poor voters than rich.

    July 7, 2011 at 3:46 pm |
    • jean2009

      Teresa. I agree,but I also know we have some very immoral people who call themselves long as they can profit on the back of the poor they have no conscience.

      July 7, 2011 at 4:58 pm |