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No Deal in Sight as Cranky Congress Cancels Recess



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So it’s official: The Senate has canceled a scheduled recess for the July 4th holiday, and will return to work next Tuesday in an effort to kick-start stalled negotiations over the debt limit. “We have important work to do,” Senate Majority Leader Harry Reid (D., Nev.) told reporters Thursday. “We have to be here.”

Reid and Senate Democratic leaders held a press conference to lay out the agenda for next week. The majority leader said he planned to hold “a series of meetings” with the entire Democratic caucus. On Wednesday, Democrats plan to meet with President Obama, he said, and would meet with the White House economic team on Thursday.

Sometime next week, Senate Budget Committee chairman Kent Conrad (D., N.D.) will introduce a budget resolution that has been approved by every Democrat on the committee. Conrad told reporters he intends to brief the entire caucus on Tuesday night, but likely wouldn’t make his proposal public until Wednesday or Thursday. Either way, he does not intend to bring the resolution before the committee, and said he was unsure how the debate would play out next week.

The biggest obstacle to a deal, Reid argued, was the Republicans’ “stubborn instance on protecting taxpayer-funded giveaways to corporations and individuals who don’t need the giveaways.” Significant tax increases must be on the table if Democrats are going sign off on a deal. “If we can’t bring revenue to the table, we’re not going to have a serious conversation,” said Majority Whip Dick Durbin (D., Ill.).

Reid continued to attack Republicans for “protecting” tax credits to owners of corporate jets, even though they account for a laughably trivial amount in the context of the federal budget (about $3 billion over 10 years). “We Democrats know that we have to do a job of working toward a balanced budget, we have to reduce our deficit,” he said. “We know that, but we need some help [from rich people].”

Sen. Chuck Schumer (D., N.Y.) said it was “really important” that GOP leaders announce publicly that taxes are on the table, and pointed to statements from several Republican Senators — Cornyn, Johnson, and Lamar Alexander (R., Tenn.), for example — which seem to indicate a willingness to consider getting rid of certain tax credits as part of a deal. He said McConnell’s “rigid position” on taxes was not in line with the rest of his caucus.

“It seems Senator McConnell has ventured out on a limb and many in his own caucus are sawing it off,” Schumer said. “It seems like Leader McConnell is willing to tank the economy for the sake of protecting tax breaks for oil companies, yachts, corporate jets.” Reid later suggested that he would hold test votes on specific tax credits in an effort to embarrass Republicans.

Meanwhile, GOP senators spent the day attacking President Obama for his “astounding lack of leadership,” in the words of Sen. John Cornyn (R., Texas). “I think the president has diminished that office and himself by giving the kind of campaign speeches that he gave yesterday,” Cornyn said in reference to the president’s Wednesday press conference, where he blamed Congress for failing to reach an agreement, and angrily chastised lawmakers for acting like a bunch of teenage girls. “Maybe if he would just take a Valium and calm down and come down and talk to us it might be helpful,” Sen. Pat Roberts (R., Kan.) told reporters at a press conference.

Speaking on the Senate floor earlier, Minority Leader Mitch McConnell (R., Ky.) extended a same-day invitation to the president to meet with Senate Republicans at the Capitol to discuss his insistence that hundreds of billions of dollars of tax increases be included in any deal to raise the debt ceiling. “That way he can hear directly from Senate Republicans . . . why what he’s proposing will not pass,” said McConnell. White House press secretary Jay Carney dismissed the invitation as “not a conversation worth having.” Obama, meanwhile, was scheduled to attend a campaign fundraiser in Philadelphia.

Freshman Sen. Ron Johnson (R., Wis.), who led the GOP effort to prevent Reid from adjourning the Senate for recess next week, initiated a colloquy on the Senate floor with freshman colleagues Rand Paul (R., Ky.), Marco Rubio (R., Fla.), Mike Lee (R., Utah), and Kelly Ayotte (R., N.H.) to attack the president’s failure to lead. Rubio even likened Obama to “a leader of a third world country.”

 

 

Some Republicans worried that Reid’s threats to hold “show votes” on tax increases, along with Conrad’s refusal to bring his proposal before the budget committee, was an indication that next week would not yield much progress on the issue. “I doubt Harry Reid’s got much constructive for us to do,” Cornyn said. “The American people need to be spared this sort of brinkmanship and gamesmanship in the run-up to the 2012 election.”

Sen. Jeff Sessions (R., Ala.), ranking member on the Senate Budget Committee, reiterated his concerns regarding the “closed doors” nature of the debt-limit negotiations, urging the debate to take place in a public forum where the American people can see what their elected officials are proposing. “I want to see what Chairman Conrad has proposed,” he told NRO. “Budgets are complicated documents, they need to be properly analyzed. It worries me that he doesn’t seem to want to share it with us.”

Sessions has been sounding the alarm about the possibility of an emergency “eleventh hour” scenario in which lawmakers are pressured to support a mysterious package, negotiated in secret, without time to properly assess it, under threat of a “national calamity” if they don’t vote yes.

Despite the huge disparity in their positions, senators on both sides agree on a couple things: 1) that no progress has been made since House Majority Leader Eric Cantor (R., Va.) pulled out of the negotiations led by Vice President Joe Biden, and 2) that a short-term debt limit extension is all but out of the question.

As such, there is a palpable tension on Capitol Hill, as lawmakers seem to have realized that they are much farther from a deal than many people had thought. Sen. Bob Corker (R., Tenn.) told reporters “the alarm bells have gone off” in Congress. “I tell people back home, no matter how irresponsible they think Congress is, believe me, it is far worse than that,” he said. “I can’t believe the markets are this calm.”

“I’m discouraged,” Sen. Rob Portman (R., Ohio) tells NRO. “The president has clearly shifted his position from trying to get to yes to a political approach, where he’s attacking the Congress and pointing fingers, which is not a good sign.”

Corker indicated that the White House was not taking the negotiations seriously, and it was now up to individual groups of senators to get together and work on a new way forward. “Everyone is focused on how do we get a deal that’s acceptable,” he said. “Obviously the best deal is having the president involved but it appears that that’s not going to happen at this moment.”

Schumer said both sides would have to share the pain. “We all know that raising the debt ceiling isn’t popular and no one side wants to own it by themselves, but we’re going to have to hold hands and do this together,” he said.

Negotiators will have a long way to go in order to bridge the gap between the two sides. A breakdown of what each side is demanding:

Republican position:

  1. No tax hikes.
  2. Significant spending cuts.
  3. Significant spending caps and budget reforms.
  4. A balanced-budget amendment to the Constitution.
  5. Significant entitlement reform (Medicare and Medicaid).

Democratic position:

  1. Tax hikes.
  2. Tax hikes.
  3. Tax hikes.
  4. Go easy on the spending cuts.
  5. In fact, let’s have billions more in “stimulus” spending to “create” “jobs.”
  6. A “deficit” cap, which would impose automatic tax hikes.
  7. Tax hikes.
  8. Balanced-budget amendments are irrelevant because Bill Clinton is a Democrat.
  9. No cuts to Medicare whatsoever (Just git rid of all the waste, fraud, and abuse!)
  10. Massive tax hikes.


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