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GOP won't push Medicare cuts at budget talk

/ Source: staff and news service reports

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.

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.

"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.

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."