The White House is denying reports, including this one, that President Obama is close to a deal with House Speaker John Boehner (R-OH) on a debt limit/deficit reduction package comprised of concrete spending cuts, and aspirational revenue increases.
White House spokesman Dan Pfeiffer tweeted that reports of a $3 trillion deal without revenues were incorrect. “POTUS believes we need a balanced approach that includes revenues,” he wrote. However, what the President believes and what he may ultimately feel compelled to sign off on are not necessarily the same. Equally, Pfeiffer’s tweet would not seem to rule out the idea of “aspirational” revenues that would come at some unspecified time in the future, while coupled with cuts that could begin immediately.
With that in mind, Senate Democrats are worried. One top Dem aide explained the problem: In early negotiations that ultimately collapsed, Obama and Boehner considered passing a package of spending cuts with a promise to tackle tax reform in the coming months. But — this is key — a failsafe written in to the grand bargain would have decoupled most of the Bush tax cuts from those cuts benefiting only top earners. If comprehensive tax reform failed to pass this Congress, those top bracket cuts would expire.
Now, the aide says, Democrats are concerned that the White House might abandon that failsafe.
Senate Democrats just had a feisty meeting with White House budget director Jack Lew, and raised concerns about this and similar reports. And in a statement to reporters after the meeting broke Senate Majority Leader Harry Reid (D-NV) sought out reporters to push Obama not to budge on his vow that any debt reduction plan must contain balance (read revenue).“I only know what you know about the agreement — the potential agreement,” Reid said. “I’ve been told — a call came in from the White House during this meeting that there’s no agreement, they’re working toward an agreement. What I have to say is this: The President always talked about balance. That there had to be some fairness in this. That this can’t be all cuts. There has to be a balance. There has to be some revenue in the cuts. My caucus agrees with that. I hope the President sticks with that. I’m confident he will.”
Exiting the meeting, Senate Budget Committee chairman Kent Conrad (D-ND) explained why Lew came to speak to the caucus — to narrow the growing rift between the White House and the Senate.
“He was invited to come and talk about where the situation is,” Conrad said. “And people expressed to him things they’re very much concerned about. He repeated what the President has said publicly and privately repeatedly: That he thinks we need a ‘big deal’ to deal with the debt and that we also need to extend the debt limit.”
He added that he doubts a large deficit reduction pass the Senate without new revenue.
“Obviously I don’t [think it could],” he said.
Multiple Senate Democrats, including Dianne Feinstein (D-CA) and John Kerry (D-MA) expressed a preference for raising the debt limit along with a modest package of spending, and following on that with a bigger deficit reduction plan modeled on the Gang of Six proposal.
“We have ground to make up between the president and the senate,” said Sen. Frank Lautenberg (D-NJ). “When they have ground to make up it means there could be a little separation between the two of you.”
At this point, Democrats are hoping they’re popping a trial balloon — proving to both Obama and Boehner that a no-revenue idea can’t pass. The other, worse option, would be if Obama tried to squeeze an agreement with Boehner through Congress with a debt default looming.
One Democratic operative close to principals in the talks put it this way: “It is now up to Reid and Pelosi to have the courage to defend Democratic values and say no to a deal that will eviscerate Medicare and Social Security. Will they?”
UPDATE: A nearly two-hour meeting of Democratic leaders at the White House broke up without any result being announced. Democratic aides were also tight-lipped. No read-outs have so far been released.