–Senate Minority Leader: Biden Talks ‘Only Discussions In Town’
–Debt Hike Provides ‘Great Opportunity’ To Fix Deficit
–Tax Reform, Social Security Fix Won’t Be In Debt Hike
–Markets Must See Debt Deal Isn’t ‘Blue Smoke and Mirrors’

By John Shaw

WASHINGTON (MNI) – Senate Minority Leader Mitch McConnell Friday
said significant reform of Medicare is integral to a comprehensive
budget agreement and must part of the deficit reduction package that is
coupled with a vote this summer on increasing the statutory debt

In a briefing, McConnell said “Medicare will be part of the
solution” to cut budget deficits. He called it “silly talk” to suggest
that Medicare reform will not be included in a deficit reduction
agreement that is linked to debt ceiling legislation.

“Medicare will be part of any agreement to reduce our long-term
debt,” McConnell said.

The Senate Republican leader said he believes that debt ceiling
legislation this summer provides Congress and the White House with a
“great opportunity” to develop a substantial spending cut agreement.

“It puts everybody at the table,” he said.

McConnell said the debt hike bill will not include tax reform or
Social Security restructuring. He said he believes Social Security
reform should be part of the talks but the White House and congressional
leaders have made it clear that it won’t be.

McConnell said Republicans are insisting that tax increases not be
part of the talks.

“I’m confident taxes will not be part of this,” McConnell said.

McConnell said the likely reaction of financial markets to any
deficit reduction plan is “not irrelevant.”

The markets would not react well to a deficit reduction agreement
that is based on “blue smoke and mirrors,” he said.

“Standard & Poors has sent us a signal,” McConnell said, referring
to the urgency of attacking the nation’s long-term deficit.

McConnell repeated that while there are plenty of conversations on
Capitol Hill on fiscal issues, the budget talks hosted by Vice President
Biden provide the best venue to develop a bipartisan budget agreement.

He called these talks “the only discussions in town.”

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

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