–Vice President Biden To Meet With Congressional Leaders On Budget
–Talks Expected To Focus On A Package That Might Go With Debt Hike
–Senate Majority Leader Reid Seeks ‘Deficit Caps’ From Biden Talks
–House Budget Panel Chairman Ryan Doesn’t See ‘Comprehensive Agreement’

By John Shaw

WASHINGTON (MNI) – As Vice President Biden meets Thursday with a
group of senior congressional leaders on fiscal issues, there are dozens
of questions floating through the air, but one central one.

What can this group realistically accomplish?

Biden will meet 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.

Experts agree that while this group includes important
congressional figures, it does not appear to be the group that has
either the stature or the budget expertise to negotiate a comprehensive
agreement.

The central issue under consideration appears to be what kind of
package can be developed that can be linked to a debt ceiling increase
that will allow it to pass Congress this year.

Senate Minority Leader Mitch McConnell said Thursday that the debt
ceiling vote is the “best opportunity” to enact deficit reduction
measures that focus on spending controls.

Senate Majority Leader Harry Reid said Thursday the U.S. has “some
problems” with spending, but that the deficit challenge is far broader.

Reid said the group will “talk seriously” about “deficit caps.”

Perhaps the most important fiscal comments this week were offered
by House Budget Committee Chairman Paul Ryan. At a Wednesday breakfast,
Ryan said he does not expect Congress and the White House to reach a
broad fiscal agreement this year.

“We are not going to get a grand-slam agreement; we are not going
to get a big comprehensive agreement,” he said at a breakfast sponsored
by Bloomberg News.

“I hope we can get a single or double,” he added.

He later indicated that this means an accord on another round of
discretionary and entitlement spending cuts and a budget enforcement
package that might include a cap on discretionary spending, an overall
cap on federal spending as a share of GDP or a target for reducing the
level of debt as a percentage of GDP.

Lawmakers and the administration are discussing what kind of budget
enforcement process might be developed to achieve any fiscal goals that
are set. One idea is using both across-the-board spending cuts and
revenue increases.

Ryan said Republicans want just spending cuts to be used, not
additional revenues.

This is one of the topics the Biden talks are likely to explore.

Baucus said Wednesday that Congress should develop a “framework for
major deficit reduction,” with deficit cuts phased in over time.”

“It is time to craft deficit reduction legislation that would
stabilize the debt held by the public by 2014 or 2015 and it should
continue to reduce the deficit in the following years as well,” Baucus
said.

He added it is critical to develop a plan to cut the deficit over
time and to create tools to make sure these goals are achieved.

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

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