Bloomberg News

Boehner Says Obama Should Engage More Directly in Debt Talks

June 02, 2011

(Updates with Moody’s debt rating review in second paragraph, Carney comments starting in ninth paragraph.)

June 2 (Bloomberg) -- House Speaker John Boehner, intensifying pressure for a quick and far-reaching deal to slash U.S. government spending, said “it’s time” he and President Barack Obama get personally involved in talks on a broad debt- reduction package.

The urgency to reach an agreement increased today after Moody’s Investors Service said it may put the U.S. government debt rating on review for a downgrade if no progress is made on increasing the government debt limit in the coming weeks.

Boehner, voicing concerns that bipartisan negotiations led by Vice President Joe Biden are proceeding too slowly, said yesterday the White House and Congress should strike a deal within a month to avoid a continuing impasse over raising the nation’s $14.3 trillion debt ceiling that could spook investors and lead to an unprecedented government default.

The Biden-led talks “are making some marginal progress, but at the rate that that’s gone, we’ll be right up against the wall,” Boehner told reporters at the Capitol yesterday. “This really needs to be done over the next month if we’re serious about no brinksmanship and no rattling investors.”

‘Not Optimistic’

Representative Steny Hoyer of Maryland, the second-ranking House Democrat, also said the talks hadn’t accomplished much. “I’m not optimistic from the standpoint that there’s been no substantive progress made yet,” Hoyer said today on CNBC. Still, he said he is encouraged that the two parties are continuing “serious meetings.”

Treasury Secretary Timothy Geithner is already using what he calls “extraordinary measures” to avoid exhausting the nation’s borrowing authority, and he has said that he will run out of options for avoiding default by Aug. 2. Boehner said he was worried that the Biden-led discussions would go down to the wire, putting Congress up against that date.

Obama “understands that we need this finished over the next month -- he said so” at a private meeting he hosted for House Republicans yesterday on the debt impasse, said Boehner, an Ohio Republican.

‘Large Ball’

Asked what more could be done to prod a compromise, Boehner said: “The president could engage himself. I’m willing. I’m ready. It’s time to have the conversation. It’s time to play large ball, not small ball.”

White House press secretary Jay Carney today shrugged off Boehner’s suggestion. “The vehicle for the negotiations are the talks with the vice president,” Carney told reporters, adding that negotiations between Biden and lawmakers “have made progress.”

Responding last night to Boehner, White House spokeswoman Amy Brundage said in a statement that Obama is “closely monitoring” the Biden talks and is being “regularly briefed’ on their progress.

Still, Boehner’s comments raised the possibility that the current debt stalemate could culminate in the year’s second high-level negotiation between Obama and Republican leaders on spending cuts. Obama and Boehner hashed out the final details of an agreement on the 2011 federal budget face-to-face at the White House in April, agreeing to about $38.5 billion in reductions with just hours to spare before a government shutdown.

‘Closely Monitoring’

Boehner made his comments a few hours after the 75-minute meeting Obama convened at the White House with the speaker and his Republican colleagues to discuss the two parties’ differences over the government’s finances. After the session, Republicans said they had criticized the president’s description of their Medicare privatization plan, calling it unfair, and pressed him to offer his own proposal for tackling the debt.

Boehner described the session as “a very good meeting. It was frank, to-the-point, it was polite,” he said.

Other House Republicans emerged indicating that the meeting broke no new ground in the push to raise the nation’s debt ceiling in exchange for reductions in government spending.

“Unfortunately, what we did not hear from the president is a specific plan of his to deal with the debt crisis” that could be evaluated by the nonpartisan Congressional Budget Office, Representative Jeb Hensarling of Texas, head of the House Republican Conference, told reporters at the White House after the meeting.

Republican Frustration

Representative James Lankford, an Oklahoma Republican, said his colleagues are frustrated because they believe the administration isn’t offering ideas publicly on how to reduce the deficit, as Republicans did in April as part of a budget plan to cut more than $6 trillion over a decade.

Obama wants to work behind closed doors on a plan that can clear Congress so that he can “step out front at the end of it and say ‘I led this,’” said Lankford.

“We have three co-equal branches of the government here, and one of them is sitting and waiting to follow,” he said.

Carney today said “we don’t need new plans.” He said the two parties “need to find common ground” and “come together, hold hands, and agree that we’re going to get this done.”

House Budget Committee Chairman Paul Ryan said he confronted Obama about how the president was characterizing the plan Ryan wrote to privatize Medicare, the government health- insurance plan for older Americans, by giving people subsidies to buy coverage.

Demagoguery Dispute

“We’ve got to get our debt under control, and if we try to demagogue each other’s attempts to do that, then we’re not applying the kind of political leadership we need to get this economy growing,” Ryan, a Wisconsin Republican, told reporters.

Obama said there had been demagoguery on both sides, Boehner told reporters later at the Capitol, adding, “But if we’re going to change the process, it’s got to start from the top.”

Carney yesterday dismissed the notion that Obama was distorting Ryan’s Medicare proposal.

“There is no question that on the issue of Medicare, we have significant differences,” Carney said. “And what the president has made clear is that he doesn’t believe that we need to end Medicare as we know it.”

Carney also said Obama “has clearly led” on deficit issues and cited the debt-reduction commission the president established last year and a plan he outlined in an April speech to cut $4 trillion in cumulative deficits within 12 years.

“His proposal is out there and I think pretty extensive,” Carney told reporters at yesterday’s White House briefing.

Biden’s Group

Biden’s negotiations over increasing the debt ceiling as part of a package of spending cuts began May 5. There have been four meetings between the vice president and six congressional leaders, with the next one set for June 9. Biden has said that progress is being made and that negotiators are trying to find savings of $1 trillion over 10 years.

House Majority Leader Eric Cantor, a Virginia Republican, said he asked Obama to work with Republicans on a “tax reform plan” that is being put together by Ways and Means Committee Chairman Dave Camp, a Michigan Republican.

He also asked the president to steer clear of “any notion that we’re going to increase taxes” as part of any agreement on raising the debt limit

“It’s counterintuitive to believe that you increase taxes on those individuals and entities that you are expecting to create jobs,” Cantor said.

Boehner said he stressed to Obama that now “is the moment” to deal with the deficit issues facing the government. “We can work together and solve this problem,” he said. “Let’s not kick the can down the road one more time.”

Obama is meeting with the House Democratic caucus at the White House today. Separately, Geithner is scheduled to meet on Capitol Hill with freshman members of the House to discuss the debt limit, one in a series of sessions he has been holding with lawmakers to explain the issue, according to the Treasury Department.

--With assistance from Brian Faler, Roger Runningen, James Rowley and Cheyenne Hopkins in Washington. Editors: Don Frederick, Ann Hughey

Catherine Dodge in Washington at cdodge1@bloomberg.net

To contact the reporters on this story: Julie Hirschfeld Davis in Washington at jdavis159@bloomberg.net;

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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