President Obama and House Speaker John Boehner are close to a deal to cut the deficit and raise the federal borrowing limit, congressional sources say.
Though both sides deny a deal is imminent, congressional Democrats who have been briefed on the proposal are voicing concerns that Obama would be conceding too much to Republicans in this agreement.
Under the floated deal, $3.5 trillion would be slashed from the budget over the next 10 years, including cuts to entitlement benefits – a key area of contention with congressional Democrats.
In another major concession, no revenue increases would be included in the deal, and George W. Bush’s middle class tax cuts would not be decoupled from higher income cuts, as called for in the earlier “grand bargain” worked out by Obama and Boehner. Instead, all revenues would be handled in a second bill, a sweeping overhaul of the U.S. tax code, to be passed before the end of the year.
Democrats worry that the President would be giving away too much in such a deal. They also question the GOP’s ability to pass tax reform down the road. But the deal would be a victory for House Republicans, who have long pushed for more than $2.4 trillion in cuts and against any revenue increases. Office of Management and Budget Director Jack Lew on Thursday met with Senate Democrats to address their concerns in the debt debate.
“The President always talked about balance,” Senate majority leader Harry Reid said following the meeting. “There has to be some fairness to this. This can’t be all cuts. There has to be balance.”
White House spokesman Jay Carney denied that the two sides were close to a deal, as did Boehner’s office. “While we are keeping the lines of communication open, there is no ‘deal’ and no progress to report,” said Boehner spokesman Michael Steel.
Updated, 3:22 p.m.