Jim Kuhnhenn, Associated Press
WASHINGTON (AP) — The Senate is moving to cast away a budget cutting plan passed by the Republican-controlled House, clearing the way for increasingly urgent government talks over raising the nation's debt ceiling. President Barack Obama and House Speaker John Boehner searched once more for an ambitious $4 trillion grand bargain, but officials said wide differences remained.
Less than two weeks from an Aug. 2 deadline that could precipitate a first-ever government default, the continuing Obama-Boehner talks kept alive the possibility of substantial deficit reduction that would combine cuts in spending on major benefit programs like Medicare and Medicaid and revenue increases through a broad overhaul of the tax code.
"We have the opportunity to do something big and meaningful," Obama declared in a newspaper opinion piece. And from the Capitol, Boehner said House Republicans were prepared to compromise and prodded Obama: "The ball continues to be in the president's court."
Talk of a deal prompted a spasm of distress among Senate Democrats worried that Obama would agree to immediate cuts but put off tax revenues that the president has said are key to any agreement. The White House immediately sought to tamp down talk of an impending deal. Democratic officials familiar with the talks said both the cuts to benefit programs such as Medicare and a tax overhaul are too complicated to undertake quickly and would have to wait up to a year to negotiate. The officials, however, said any agreement would have to have strict requirements that would guarantee Congress had to act.
First, however, the Democratic-controlled Senate on Friday planned to dispense with a House-passed measure that would raise the debt limit by $2.4 trillion on the condition that Congress sends a constitutional balanced budget amendment to the states for ratification and approves trillions in long-term spending cuts.
Senate Majority Leader Harry Reid, D-Nev., said the legislation "doesn't have one chance in a million of passing the Senate," and privately senior Republicans in both houses were anticipating its defeat.
That left bargaining for a bipartisan compromise as the only alternative. Negotiations were proceeding on multiple fronts as officials searched for the clearest path to avoid a potentially devastating default. Each path faced sizable hurdles.