This option entails shaving about $2.4 trillion off the budget deficit over 10 years. It would achieve that via spending cuts and would not require a vote to increase taxes. (Many Republican lawmakers pledged during their campaigns never to vote to raise taxes.) In return, Congress would vote for a short-term extension of the debt limit.
This is the option House majority leader Eric Cantor (R) of Virginia has been pushing. “Currently, there is not a single debt limit proposal that can pass the House of Representatives,” he said in a statement on July 13.
The basis of this option is the bipartisan debt talks led by Vice President Joe Biden, which derailed last month after GOP negotiators walked out in a dispute over tax increases.
Representative Cantor, who led the walkout, says the Biden talks identified more than $2 trillion in spending cuts that could be the basis of a debt deal, along with cuts to entitlement programs. Obama said July 13 that he could support $1.7 trillion in spending cuts identified in the Biden talks – and could accept more cuts if Republicans would agree to tax hikes, according to unconfirmed accounts of the meeting by congressional aides.
Sticking points: Democrats say that agreed cuts, as opposed to “identified cuts,” amount to less than $1 trillion and that, in any case, nothing is agreed until all is agreed. Democrats are holding out for a “balanced approach,” even in a mini-deal, that includes raising taxes on the wealthy and cutting corporate tax breaks to help whittle federal deficits.
As Cantor pressed his case for a mini-deal during White House debt talks on July 13, the meeting reportedly ended in acrimony. Obama has said he would veto a deal that does not extend the debt limit high enough to give the government room to operate through the 2012 election.
