(Bloomberg News) A bipartisan Senate proposal for a $3.7 trillion debt-cutting plan praised by President Barack Obama faces resistance from House Republicans, as lawmakers intensify efforts for a compromise on government spending less than two weeks before a threatened default.
Obama said he will renew talks at the White House this week with congressional leaders as the Democratic-led Senate and Republican House pursue divergent paths toward ending the stalemate over lifting the nation's $14.3 trillion debt limit.
"The problem we have now is we're in the 11th hour and we don't have a lot more time left," Obama said yesterday, referring to an Aug. 2 deadline officials have set for lifting the debt cap. The president, in remarks at the White House, said he will urge congressional leaders "to start talking turkey" and get "down to the hard business of crafting a plan that can move this forward."
House Republicans last night passed their debt-reduction plan 234-190 -- legislation that stands little chance of passing the Senate and that Obama has said he would veto if it did. The measure would cut and cap government spending and allow the debt-ceiling to be raised by $2.4 trillion only if Congress approves a balanced budget amendment to the Constitution.
The Senate plan that emerged yesterday from the so-called Gang of Six combines spending cuts with a smaller amount of tax increases. While House Republican leaders indicated a willingness to consider the proposal, they and other members of their fiscally conservative caucus continue to stress opposition to a debt compromise that includes more taxes.
No Tax Increases
"Tax increases aren't going to fly in the House," said Representative Kevin Brady, a Texas Republican and a member of the tax-writing Ways and Means Committee.
That suggests a backup plan along the lines of one still being worked out by Senate Republican leader Mitch McConnell of Kentucky and Senate Majority Leader Harry Reid, a Nevada Democrat, may offer the best chance for a compromise before the Aug. 2 deadline when the Treasury Department says the government will hit the debt limit. The plan would give Obama $2.4 trillion in new borrowing authority in installments.
An NBC News/Wall Street Journal poll released yesterday showed that most Americans favor Obama's approach to a compromise deal rather than the Republican position. According to the survey, conducted July 14-17, 58 percent backed Obama's push for reducing the deficit by $4 trillion over the next decade through a combination of budget cuts and a tax increase, while 36 percent supported the Republican proposal to shave the deficit by $2.5 trillion solely by reining in spending. The poll's error margin is plus-or-minus 3.1 percentage points.
Immediate Cuts
The plan Obama lauded that was released yesterday by the Senate's Gang of Six, led by Republican Saxby Chambliss of Georgia and Democrat Mark Warner of Virginia, proposes $500 billion in immediate spending cuts.