msnbc.com staff and news service reports
updated 5/4/2011 11:41:13 PM ET 2011-05-05T03:41:13

Senior Republicans say they will look for common ground Thursday at debt-reduction talks and not push their contentious plan to overhaul Medicare, the Washington Post reported.

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But that doesn't mean the GOP is backing away from its Medicare privatization proposal as a monthslong negotiation over what to do about the spiraling U.S. debt gets under way.

Vice President Joe Biden and top lawmakers are hoping to cut a deficit that could reach $1.6 trillion this year. Both sides have modest expectations going into Thursday morning's meeting at Blair House.

Story: Geithner gives Congress more time on debt limit

"This perhaps is just the beginning, but one that can hopefully form the framework for a productive series of meetings," said House Majority Leader Eric Cantor of Virginia, who represents House Republicans. "We need to understand where they're coming from."

Cantor told the Post that Republicans remain convinced that reining in federal retirement programs is the key to stabilizing the nation’s finances over the long term. But he said Republicans recognize they may need to look elsewhere to achieve consensus after President Obama "excoriated us" for a proposal to privatize Medicare.

Cantor pointed to GOP proposals to save $715 billion over the next decade by ending payments to wealthy farmers, limiting lawsuits against doctors, and expanding government auctions of broadcast spectrum to telecommunications companies.

Democrats said the encouraging move could smooth the way to a compromise allowing Congress to raise the legal limit on government borrowing and avoid a national default.

"There's common ground there," Rep. Chris Van Hollen, D-Md., senior Democrat on the House Budget Committee, told the Post.

The talks come as Congress begins to consider raising the debt ceiling above its current $14.3 trillion limit. Treasury Secretary Timothy Geithner has effectively taken some pressure off the talks by informing Congress this week that the government could continue to meet its obligations through Aug. 2.

All sides — the White House, and Democrats and Republicans in Congress — agree that spending cuts need to be approved in conjunction with must-pass legislation increasing the government's ability to borrow to pay its bills. Treasury said Wednesday that the government is borrowing an average of $125 billion a month.

Story: All eyes on 'Gang of Six' as deficit deal nears

White House press secretary Jay Carney said the Thursday meeting, expected to last two hours, "is the beginning of an important process."

The meeting is designed to have all sides place their plans on the table, narrow the focus to areas of common ground and begin setting up a framework for discussions.

Cantor told the Post that House Republicans will seek an agreement that includes spending cuts in the fiscal 2012 budget, beginning Oct. 1; enforceable targets that would require Congress to continue cutting spending in future years; and action by the end of this year on legislation that would begin to meet those targets.

Cantor also said through a spokesman that the budget proposal by Rep. Paul Ryan, R-Wisc., who called for the Medicare overhaul, remains the basis for his negotiations.

Biden is not expected to bring a new proposal to the table. But the White House team will have in hand more details based on Obama's April proposal to reduce the deficit by $4 trillion over 12 years.

In addition to Biden, the administration will be represented by Geithner, White House budget director Jacob Lew, and Gene Sperling, director of the White House National Economic Council.

Obama's plan calls for about $1 trillion in higher revenues, a nonstarter with House Republicans. At the same time, Republican plans to slash Medicaid and turn Medicare into a program in which future beneficiaries receive subsidies to purchase private health insurance is a dead letter with the White House and Democrats.

Six lawmakers will attend: Cantor; Senate Republican Whip Jon Kyl; Senate Appropriations Committee Chairman Daniel Inouye, a Democrat from Hawaii; Finance Committee Chairman Max Baucus, a Democrat from Montana; and senior House Democrats Jim Clyburn of South Carolina and Chris Van Hollen of Maryland.

Some Republicans hope to attach legislation sponsored by Republican Sen. Bob Corker and Democratic Sen. McCaskill to the so-called debt limit bill. Their proposal would cap spending at about 21 percent of the size of the economy, backed up by automatic spending cuts if Congress is unable to enact legislation that brings spending in under the cap.

The White House strongly opposes the idea, saying it would force drastic, across-the-board cuts to Social Security, Medicare and Medicaid while doing nothing to force lawmakers to clean out a tax code laden with tax breaks.

"Arbitrary spending caps are nothing but a backdoor means of imposing immediate and deep cuts in Medicare and Social Security," said Kenneth Baer, spokesman for the White House budget office.

Cantor wouldn't dismiss the idea, but he said Republicans want something concrete immediately.

"All that is fine, but the history of Congress has been that anytime you put enforcement mechanisms in place like that, ultimately they're waived," he said. "We're about trying to affect real cuts, real reforms this year."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Budget passage tees up debt battle

  1. Closed captioning of: Budget passage tees up debt battle

    >>> to washington today, on capitol hill . no frommy like last friday night when the possible government shutdown was looming, hanging over everyone pftsz head. today, just a vote to pass there budget. now we transition nicely into the next fight, even bigger, over the national debt . kelly o'donnell has the story from the hill. good evening.

    >> reporter: hi, there, brian. the house and senate wrote the check to get the government going this year, but john boehner had to sell hard to try to keep conservatives who want bigger cuts on board.

    >> the house will be in order.

    >> reporter: defending the knujt deal that kept the government open, pespeake eer boehner knew dozens of problems would bolt, and they did.

    >> is it perfect, no? but welcome to divided government .

    >> most democrats rejected the plan, but without enough republicans to pass it, democrat support made the difference.

    >> the yeas are 260. the nays are 267.

    >> it eliminates more than $38 billion over the next six months. that includes money that would not have been spent skna. budgeted for things like earmarks.

    >> these are real spending cuts.

    >> a charge boehner took on himself.

    >> every dime in this bill that is cut is a dime that washington will spend if we leave it on the table wrarb.

    >> the budget deal came with strings. congress had agreed to take separate votes on two hot-button issues that republicans demanding. defunding the president's law, and funding for planned parenthood .

    >> it would have a devastating impact on women pfts health across the country.

    >> an even bigger fight issoever here over raising the country's borrowing limit and how to get control over the $14 trillion deficit.

    >> the debate ahead of us is more than spending levels. it's about the role of government itself.

    >> looking inside the house vote, unusual agreement from two indz of the spectrum. nancy pelosi and michelle bachman voted no on the deal, suggesting both parties got some and gave some to get the government going.

    >> kelly, thanks.

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