Biden-led budget talks resume on Capitol Hill

[June 10, 2011]  WASHINGTON (AP) -- Vice President Joe Biden and GOP negotiators sparred over taxes Thursday in a private meeting that exposed their wide differences as the clock ticks on negotiations to let the government resume borrowing more than $100 billion a month to pay its bills.

Both sides hope to pass the measure well before an early August deadline to avoid a first-ever, market-rattling default on U.S. obligations.

It was the sixth meeting between Biden and top lawmakers. With the talks moving slowly, they agreed to pick up the pace with three meetings next week.

In the 2 1/2-hour meeting, Biden and Treasury Secretary Timothy Geithner made a pitch for more revenue. Republicans resolutely oppose anything that could be called a tax increase.

"Any balanced packaged has to end big loopholes like subsidies for the oil and gas industry," said Rep. Chris Van Hollen, D-Md., one of two House Democrats participating in the talks.

Last month, Biden told reporters: "I've made it clear ... revenues have to be in the deal." Republicans involved in the talks, however, say they believe Biden is mostly going through the motions.

Still, the White House push for revenues is noteworthy because Democrats will have to provide votes to get the final measure passed because many tea party-backed House Republicans are likely to oppose any measure to increase the debt limit.

The vote is already so unpalatable for Republicans that it's difficult to imagine GOP negotiators going along with new taxes and risk the wrath of the tea party and anti-tax activists even if it means Democrats will offer up larger spending cuts.

Rep. Eric Cantor of Virginia, who's representing House Republicans in the talks, told the administration that tax increases can't pass the GOP-controlled House.

Republicans have complicated the talks with a demand that any increase in the borrowing limit be matched with spending cuts of equal or greater size, though the cuts could be over the next decade or more.

Under current estimates it'll take at least $2.4 trillion in new borrowing simply to could keep the government afloat until 2013 and guarantee that lawmakers wouldn't have to make another politically difficult vote before next year's elections.

There's no sign the group is discussing cuts of that magnitude. Biden has said he thinks the group can come up with more than $1 trillion in deficit savings.

Senate GOP Leader Mitch McConnell of Kentucky has pledged that any deal that wins his vote will have to wring savings from Medicare. Defending the politically sacrosanct program, however, is emerging as a hot issue in Democratic efforts to retake the House and keep control of the Senate.

Negotiators say the meetings have been constructive, but no agreements are in place despite calls by both President Barack Obama and House Speaker John Boehner, R-Ohio, for one by early July.

Cantor said the meetings next week would demonstrate "if we can get a result." Spokesman Brad Dayspring said Cantor remains hopeful.

Cantor and Sen. Jon Kyl, R-Ariz., are trying to keep the focus on spending cuts.

"We believe that many of the problems surrounding the lack of job creation and growth in this country have to do with the fact that there isn't a credible plan to manage down the debt and deficit in this country," Cantor said.

Biden left without making any comment.

Failure to raise the nation's debt ceiling could lead to a first-ever U.S. default on its obligations, sure to roil stock markets and, economists warn, possibly push the teetering economy back into recession.

[Associated Press; By ANDREW TAYLOR]

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