Debt talks resume with focus on healthcare
Key points
- Talks to avert a potentially catastrophic debt default resume on Tuesday after signs Republicans might soften their stance over a main obstacle to a deal with Democrats, but hopes for a breakthrough remain slim.
- Vice President Joe Biden leads senior lawmakers in their third round of negotiations to lift the $14.3 trillion U.S. debt limit before an August 2 deadline for action.
- A congressional aide said the session would focus on savings in Medicare and Medicaid, government-funded healthcare at the core of so-called federal entitlement programs that have emerged as a major block to an agreement.
- Top Republicans say Biden's talks are laying vital groundwork for an eventual compromise on measures to pare down the U.S. budget deficit, but President Barack Obama will ultimately be required to seal the deal.
Talks to avert a potentially catastrophic debt default resume on Tuesday after signs Republicans might soften their stance over a main obstacle to a deal with Democrats, but hopes for a breakthrough remain slim.
Vice President Joe Biden leads senior lawmakers in their third round of negotiations to lift the $14.3 trillion U.S. debt limit before an August 2 deadline for action.
A congressional aide said the session would focus on savings in Medicare and Medicaid, government-funded healthcare at the core of so-called federal entitlement programs that have emerged as a major block to an agreement.
Top Republicans say Biden's talks are laying vital groundwork for an eventual compromise on measures to pare down the U.S. budget deficit, but President Barack Obama will ultimately be required to seal the deal.
No one expects anything to happen fast, but attention has shifted to Biden's group after separate discussions among a group of six senators stalled last week. It will meet in Senate offices on Capitol Hill at 3 p.m..
Failure to increase the debt limit could force the United States to renege on its debt obligations, risking devastating fallout for the country and world economies.
"We face a lot of real problems. We shouldn't manufacture problems," said White House budget chief Jacob Lew. "The debt limit is going to have to be extended. That's a political, not an economic crisis. We have an economic problem. We could turn it into a crisis by failing to act," he told CNBC television.
Republican leaders in the House of Representatives will stage a vote next week to raise the debt limit by $2.4 trillion, knowing the measure will fail because it will not be accompanied by spending cuts, aides said on Tuesday.
The vote will underscore support among their ranks for significant spending cuts and budget reforms, as opposed to the Obama administration's desire for a "clean" bill to lift the borrowing limit without any strings attached.
Republicans say they are open to a compromise on their plan to slash healthcare costs to trim trillions of dollars from the U.S. budget deficit in return for raising the debt ceiling.
Democrats, led by Obama, say they too want to control spending, although they have criticized cuts proposed by Republicans as too drastic.
But Democrats also want to boost revenue by raising taxes, which Republicans flatly reject as part of a debt deal, a clear warning that financial markets should expect negotiations to push right up to the brink of default before a deal is done.
"I don't think the most brilliant negotiators, with the best of intentions, can resolve this problem," said Scott Lilly, a former congressional budget specialist and now a senior fellow with the Center for American Progress.
HEALTHCARE IN FOCUS
Written and revised by
David Cohen, M.D.
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