President Obama began his direct involvement in budget negotiations Monday by meeting separately with Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell. The White House called for a “balanced” approach that would include some additional revenue from changes in the tax code, but McConnell reiterated his party’s opposition to tax increases before meeting with Obama.
The White House meetings came after Republican negotiators last week dropped out of bipartisan talks led by Vice President Joe Biden, complaining that the Democrats continued to talk about tax increases as part of a deficit-reduction package.
Another point of conflict has been GOP opposition to cuts in military spending, although some Republicans are now hinting at greater flexibility in that area. Many Democrats, meanwhile, remain wary of entitlement reform.
To avoid default and the resulting economic turmoil, Congress must raise the federal debt limit soon – ideally with some measures that will start to put the country on a more responsible fiscal path. The Treasury Department says that on Aug. 2 it will run out of options to avoid default. Even before then, however, a stalemate in Washington could cause turmoil in financial markets.
Elected officials should keep all options, including those that would raise additional revenue, on the table for discussion. We need bipartisan cooperation in developing a plan that, while not jeopardizing the current economic recovery, will substantially curb projected deficits over the next decade and beyond.