–As Biden Reconvenes Talks, Fed’s Bernanke to Address Budget Conference
–Vice President Biden to Hold Talks Tuesday, Wednesday, Thursday

By John Shaw

WASHINGTON (MNI) – Vice President Joe Biden will reconvene budget
talks with congressional leaders Tuesday at 2:00 p.m. (1800 GMT) on
Capitol Hill in the first of three meetings this week.

Biden is scheduled to meet with lawmakers Tuesday, Wednesday and
Thursday.

Shortly after Biden’s talks resume, Federal Reserve Board Chairman
Ben Bernanke will give the opening remarks at 2:30 p.m. (1430 GMT) at a
budget conference on the topic of “Debt Ceiling, Fiscal Plans, Market
Jitters: Where Do We Go From Here?”

The Biden talks are seeking a deficit reduction package that can 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, and
Treasury Secretary Tim Geithner has said Congress must pass legislation
increasing the debt ceiling by August 2 to avoid risk of default.

Biden is negotiating with House Majority Leader Eric Cantor, Senate
Minority Whip Jon 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 is represented by Biden, Geithner, White House
budget director Jack Lew and National Economic Council Director Gene
Sperling.

House Speaker John Boehner has said it is important to forge a
deficit reduction agreement by the end of June so a vote on debt ceiling
legislation can occur well before the August 2 deadline.

Cantor, the House Majority Leader, gave reporters a relatively
upbeat assessment of the Biden talks Monday. He said the talks are
animated by a sense of “urgency” to reach an agreement on a large
package of spending cuts.

Cantor said he is “beginning to see the essence of convergence on
savings” in the budget talks hosted by the vice president. He said the
three meetings this week will hopefully “increase the momentum for some
type of resolution.”

Cantor repeated that the debt ceiling increase legislation should
include both specific spending cuts and budget process changes. He
repeated that the spending savings should be in “trillions” over 10
years and should be at least as large as the increase in the debt
ceiling.

It is imperative for the White House and Congress and the White
House to reach an agreement on a plan to “manage down the debt and
deficit,” he said. “We don’t want the markets to make this decision for
us.”

Cantor said that from his perspective “everything is on the table
except for raising taxes.”

Kyl, the Senate Minority Whip, told reporters last week that
Republicans want a package of more than $2.4 trillion in savings over a
decade or more as a condition for increasing the debt ceiling by that
same amount.

Senate Majority Leader Harry Reid Tuesday morning spoke favorably
of the Biden talks, saying “progress is being made.”

But Reid did not offer conciliatory words to Republicans. He ripped
into the fiscal plan developed by House Budget Committee Chairman Paul
Ryan, calling it a “budget that destroys Medicare.” He later called it
“the Republican plan to end Medicare.”

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

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