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Democrats Divided on Debt

White House to Take the Lead as Reid’s Caucus Shies Away From Specifics

Senate Democrats won’t be putting much on the table when the first bipartisan debt panel meeting with Vice President Joseph Biden takes place today at Blair House.

That’s partly by design, partly by necessity.

Senate Majority Leader Harry Reid appears to be eyeing the less-is-more strategy that he employed during the partisan brawl over spending that almost ended in a government shutdown this year. Just as he did then, the Nevada Democrat is keeping his own cards close to his vest, urging his Caucus to keep its options open and waiting to see what the White House puts on the table.

Democratic aides said there’s no upside to putting out a specific proposal at the start of the debt limit negotiations. That’s particularly true after Treasury Secretary Timothy Geithner said this week that they now have until about Aug. 2 to raise the $14.3 trillion debt limit and avoid a possible catastrophic default on the government’s obligations.

There’s also not much point in getting out ahead of the White House, Democrats said.

“Ultimately it’s the White House’s show,” one senior aide said.

Senate Democrats, however, will make it clear that while they want to cut the deficit, they will stand up for the party’s values, including protecting social safety-net programs for seniors, the aide said.

“You don’t need to come in with a document to have a plan,” the aide said.  

But even if Reid wanted to put a specific proposal on the table, his caucus is deeply divided over what to do, with perhaps a half-dozen approaches under consideration. Plus, the Majority Leader has already watched three in his caucus sign on to a Republican-backed spending cap, and he will have to contend with liberals worried about proposals that include deep spending cuts to their favorite programs.

“It’s a mess,” another Democratic aide said. 

Sen. Patty Murray acknowledged that Democrats don’t yet have a plan.

“I think there is the fact that we need to come to consensus, but on what it is yet, we’re not there,” the Washington state Democrat said.

Reid and Finance Chairman Max Baucus (D-Mont.) have pointed to a debt trigger as a possible way to reach a deal, but they have stopped short of embracing a particular proposal. At a hearing Wednesday, Baucus warned that a trigger should include safeguards that don’t make future recessions worse by forcing deep budget cuts at the same time.

Democratic trigger proposals, including President Barack Obama’s and one being written by Sen. Ben Nelson (Neb.), would require automatic revenue increases as well as spending cuts if the deficit does not shrink. But Republicans oppose anything that could lead to a tax increase.

Senate Budget Chairman Kent Conrad (D-N.D.) on Wednesday predicted he could get the votes for his own budget blueprint in committee next week, despite early criticism of his plan within the Democratic caucus.

But it’s still not clear when or whether Reid would let him bring it to the Senate floor, considering Republicans would have unlimited opportunities for politically difficult amendments.

And Conrad acknowledged Wednesday that it’s possible the Biden talks could ultimately bypass the budget resolution process entirely.

That’s because a budget resolution simply sets rules for future legislation. It’s not a law and is not signed by the president.

Republicans, meanwhile, said Democrats have been struggling because Obama’s original budget plan was so weak.

“Nobody took the president’s proposal seriously, not even Democrats,” Sen. Mike Johanns (R-Neb.) said. “I think they are trying to figure out what to do because there is no proposal.”

House Republicans enter the meeting even as they continue to work on an internal agreement on what they want in return for a debt limit increase. House Majority Whip Kevin McCarthy (R-Calif.) this week convened a series of listening sessions aimed at polling rank-and-file Members on what they want and to hash out a unified position. That process is expected to take several weeks, and Republicans have said it is unclear what specifics they will need to deliver enough votes for the bill. 

Still, House Majority Leader Eric Cantor (R-Va.) will walk into the room with the budget blueprint written by Budget Chairman Paul Ryan (R-Wis.) and supported by a majority of the party. Senate Republicans represented by Minority Whip Jon Kyl have coalesced around proposals for a balanced-budget amendment as well as tough new caps on spending.

“If we’re going to do business here, we’ve got to mean business,” the Arizona Republican said. “Let’s see exactly what they’re talking about.”

Kyl and Cantor sent a letter Tuesday to Biden asking for a specific proposal that can be scored by the Congressional Budget Office.

“Such information will be necessary to have meaningful discussions,” they said.

“Now that we have made our position clear, it is incumbent on White House and Senate to make their position clear,” a senior House GOP aide said. “We should rule out the things that are unpalatable to each side right off the top with each other for this to be productive.”

For House Republicans, that’s anything that hints of a tax increase.

“The reality is, a tax increase in any form simply cannot come close to passing the House,” the aide said.

Several Senators said they still hope that the bipartisan “gang of six” will ultimately reach a broad agreement that could jump-start the talks. But the group is on a hiatus, with Sen. Tom Coburn (R-Okla.) out of town for a family illness, and it risks becoming irrelevant as the talks head to the leadership level instead.

John Stanton contributed to this report.