–Obama and Biden To Meet Separately With Sens. Reid, McConnell Monday
–House Speaker Boehner Says Debt Bill W/Tax Hikes Would Fail In House
–Biden Says ‘Next Phase’ of Budget Talks Shift To Obama, Hill Leaders
–Senate Budget Panel Chairman Explores ‘Another Way’ on Budget

By John Shaw

WASHINGTON (MNI) – After the only two Republican members of his
budget negotiations decided to drop out of the talks Thursday, Vice
President Joe Biden handed the high-stakes negotiations over to
President Obama, House Speaker John Boehner and Senate Majority Leader
Harry, with supporting roles to be played by Mitch McConnell, the Senate
Minority Leader, and Nancy Pelosi, the House Minority Leader.

While Biden’s handing off the budget talks to a higher pay grade
was always expected to occur, it was done this week in a more jarring
and chaotic way than virtually anyone expected.

Big questions remain about whether Obama and congressional leaders
can nail down a broad deficit reduction and debt limit agreement in the
coming weeks.

The White House announced Friday afternoon that Obama and Biden
will hold budget-related meetings with Reid Monday morning and McConnell
Monday evening. Obama met with Boehner on the budget Wednesday evening
and with Pelosi and other House Democrats Thursday.

Biden has said that the budget talks he led for six weeks made
“significant progress” toward a budget agreement that would generate
“substantial savings.”

But he added that these talks are now “in abeyance, an indirect
reference to the decision by House Majority Leader Eric Cantor and
Senate Minority Whip Jon Kyl Thursday to leave the negotiations that
Biden had been presiding over since early May.

Biden said the goal of the talks he chaired was to create a broad
fiscal framework that could be presented to “our respective leaders” to
consider and conclude. “We have made real headway and laid the
groundwork to get this done,” Biden said.

The vice president said a final agreement should take a “balanced
approach that finds real savings across the budget — including domestic
spending, defense spending, mandatory spending and loopholes in the tax
code.”

Boehner, in a statement Friday, said again that a debt ceiling
increase bill that is coupled with a plan that includes tax increases
could not pass in the House.

The Speaker repeated that any debt ceiling increase this summer
must be accompanied by a spending cut package that is at least as large
as the debt hike. He also said the deficit cutting package must include
budget enforcement reforms.

“If the president wants this done, he must lead. We have an
extraordinary opportunity to do something big for our economy and our
country,” Boehner said.

McConnell, also in a Friday statement, said he hopes that Obama is
“finally ready” to outline his plan for cutting budget deficits and
controlling rising debt.

It remains unclear what tentative agreements, if any, the Biden
group was able to reach. Republicans staffers have said the talks
identified up to $2 trillion in 10 year budget savings while Democrats
say the number is closer to $1 trillion.

Biden negotiated with Cantor, Kyl, Senate Appropriations Committee
Chairman Dan Inouye, Senate Finance Committee Chairman Max Baucus,
Assistant House Minority Leader Jim Clyburn and Rep. Chris Van Hollen,
the top Democrat on the House Budget Committee.

The administration was represented by Biden, Treasury Secretary
Timothy Geithner, White House budget director Jack Lew and the director
of the National Economic Council Gene Sperling.

The Biden talks sought a deficit reduction package that could be
developed to coincide with this summer’s vote on debt ceiling
legislation.

The U.S. has already reached its $14.29 trillion debt ceiling.
Geithner has said that Congress must pass legislation increasing the
debt ceiling by August 2.

Senate Budget Committee Chairman Kent Conrad told reporters
Thursday that he continues to work with a bipartisan group of senators
on a $4 trillion deficit reduction plan. He called his plan “another
way” to get out of the current fiscal impasse.

“You need savings of that magnitude to alter the trajectory of our
fiscal situation,” Conrad said, referring to $4 trillion in 10 year
deficit cuts.

But Reid, the Senate Majority Leader, appeared to dismiss Conrad’s
desire to enter the budget fray.

“I think we’re beyond Gangs of Five and Gangs of Six, though the
work they’ve done has been extremely important,” Reid said.

“I think it’s in the hands of the Speaker and the president and,
sadly, probably me,” he said.

** Market News International Washington Bureau: (202) 371-2121 **

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