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Ga. leaders: Cut spending then increase debt ceiling
Debt could cause another recession
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WASHINGTON — The latest standoff in the capital over spending cuts and raising the debt ceiling escalated Wednesday, with next year's election looming over the debate.

Republican congressional leaders met with President Barack Obama at the White House. They complained he had not produced a detailed plan of spending cuts and accused him of playing politics over Medicare.

The White House said Obama has in fact led on the issue and made clear he has no intention of dropping what Democrats believe is a winning political issue: accusing the GOP of trying to destroy the popular health care program for seniors.

"He doesn't believe that we need to end Medicare as we know it," press secretary Jay Carney said.

Republicans said their plan would save Medicare, not end it, and they in turn accused Obama of failing to present any proposals to preserve Medicare or drive down deficits at all.

"Unfortunately, what we did not hear from the president is a specific plan," Rep. Jeb Hensarling, R-Texas, said.

At the heart of the dispute is an Aug. 2 deadline to raise the government's borrowing limit or risk an unprecedented credit default that the White House and even many Republicans say would be disastrous for the U.S. economy.

Republicans are refusing to approve the debt-limit increase without ordering spending cuts topping a trillion dollars at the same time. The White House is insisting that in addition to spending restraint the deficit trimming must include tax increases that Republicans say are off the table.

The session between Obama and House Republicans came on the heels of a symbolic and lopsided vote the day before against a GOP proposal to raise the cap on the debt by $2.4 trillion. The proposal, intended to prove that a bill to increase the borrowing limit with no spending cuts is dead on arrival, failed badly Tuesday on a 318-97 vote.

Georgia's GOP leaders are joined in opposing the debt limit move without accompanying spending cuts.

"The debt crisis poses such a serious threat to our economy that I will not support this request from President Obama to raise the debt limit," said U.S. Rep. Tom Graves, R-Ranger, who voted against the measure Tuesday in the House. "The federal government has enjoyed an era of unprecedented recklessness, behaving as if the American taxpayers have given it a blank check.

"The American people work too hard and are taxed too much to be wrongly burdened with debt in excess of $14 trillion. I sincerely hope the president and Senate leaders come back to the negotiating table ready to do the right thing for this country, and pass a proud legacy of fiscal responsibility to future generations of Americans."

Sen. Saxby Chambliss, a member of the "Gang of Six" group that has tried to seek a bipartisan consensus, agreed.

"Congress cannot continue to kick this can down the road and continue to further burden our children and grandchildren," he said in a statement.

"Although my talks with Sen. (Mark) Warner (D-Va.) have hit a few bumps, we continue to work together to find a solution. I believe that by being at the table, representing conservatives and Georgians, Sen. Warner and I will be able to produce legislation that will fix our nation's problem without compromising conservative's core beliefs."

Sen. Johnny Isakson blames Democrats for not coming up with a feasible budget to help balance the nation's ledger.

"As our nation exceeded the $14.3 trillion debt limit earlier this week, it is absolutely unacceptable that the Senate has yet to produce a budget," Isakson said in a statement on his website. "I strongly urge Senate Democrats to bring forth a budget so we can formally debate this critical issue on the floor of the United States Senate."

Negotiations are being led in private by Vice President Joe Biden and a much smaller group of lawmakers who have recently expressed confidence they'll be able to identify at least $1 trillion in cuts over the next decade. Negotiators are considering reductions in student loan subsidies, farm payments and support for federal workers' pensions. The Biden group next meets June 9.

Wednesday allowed the president a private meeting with his Capitol Hill antagonists, and more than that a chance for both sides to recite now familiar political points. A key topic was Medicare, the massive government health insurance program for Americans 65 and older.

A plan put forward by House Budget Committee Chairman Paul Ryan would not affect people older than 55, but future Medicare beneficiaries would instead be given government subsidies to purchase private health insurance. Independent analysts have concluded beneficiaries would end up paying more.

Democrats have turned that into a political weapon with what Republicans are decrying as "Mediscare" tactics, using it as the basis of attack ads against the GOP. A special election in New York last week turned into a referendum on Medicare, and the result was a Democratic victory in a Republican-heavy New York district. New Rep. Kathy Hochul was sworn in Wednesday.

That's led to unease among Republicans who voted for the plan and elation among Democrats who intend to exploit the issue for all its worth as the 2012 presidential election approaches.

If no action is taken, Treasury Secretary Tim Geithner has warned, the government could default on its obligations and risk turmoil that might plunge the nation into another recession or even an economic depression.

The government already has reached the limit of its borrowing authority, $14.3 trillion, and the Treasury is using a series of extraordinary maneuvers to meet financial obligations. In an update on the debt status, the Treasury Department said Wednesday that recent spending and tax receipts had made no change in its previous estimate that the government will run out of maneuvering room to avoid an unprecedented default on the national debt on Aug. 2.

Associated Press contributed to this report.

 

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