December 4, 2020

Amid New Talks, Some Optimism on Debt Crisis

After a tense day of Congressional floor fights and angry exchanges, Senator Harry Reid, the majority leader, called off a planned showdown vote set for after midnight, but said he would convene the Senate at noon on Sunday for a vote an hour later. He said he wanted to give the new negotiations a chance to produce a plan to raise the federal debt limit in exchange for spending cuts and the creation of a new Congressional committee that would try to assemble a long-range deficit-cutting proposal.

“There are many elements to be finalized and there is still a distance to go before an arrangement can be completed,” said Mr. Reid, who just a few hours earlier had played down talk of any agreement. “But I believe we should give everyone as much room as possible to do their work.”

Mr. Reid’s announcement set off an almost audible sigh of relief on Capitol Hill, where lawmakers and their aides had been bracing for an overnight clash over the debt following a day that had seen a heated House vote and lawmakers trudging from office to office in search of an answer to the impasse.

The first indication off a softening of the hard lines that have marked weeks of partisan wrangling over the debt limit came in the afternoon when the two leading Congressional Republicans announced that they had reopened fiscal talks with the White House and expected their last-ditch drive to produce a compromise.

Following the House’s sharp rejection of a proposal by Mr. Reid to raise the debt limit and cut spending, Senator Mitch McConnell of Kentucky, the Republican leader and a linchpin in efforts to reach a deal, said he and Speaker John A. Boehner were “now fully engaged” in efforts with the White House to find a resolution that would tie an increase in the debt limit to spending cuts and other conditions.

“I’m confident and optimistic that we’re going to get an agreement in the very near future and resolve this crisis in the best interests of the American people,” said Mr. McConnell, who noted he was personally talking to both Mr. Obama and Vice President Joseph R. Biden Jr., a favorite partner in past negotiations.

Mr. Boehner, who would have to steer a compromise through the House, said he based his confidence on the prospect of an agreement on the sense that “we’re dealing with reasonable, responsible people who want this crisis to end as quickly as possible.”

A Democratic official with knowledge of the talks said that Mr. McConnell called Mr. Biden early Saturday afternoon, the first conversation between the two men since Wednesday. The official said they talked at least four more times on Saturday as they tried to work out an agreement.

The deal they were discussing, this person said, resembled the bill that Mr. Boehner won approval for in the House on Friday more than it did the one that Mr. Reid had proposed.

It would immediately raise the debt ceiling by about $1 trillion, accompanied by a similar range of spending cuts, and set up a new bipartisan committee that would work to find deeper cuts in exchange for a second debt limit increase that would extend through the 2012 election.

A failure of the new committee to win enactment of its proposal could then set off automatic spending cuts across the board, including to entitlement programs. Other ideas were swirling around the Capitol as lawmakers searched for a way to avoid default. One of Mr. Reid’s top lieutenants said he saw at least a glimmer of hope.

“We are a long way from any sort of negotiated agreement,” said Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, “but there is certainly a more positive feeling about reaching an agreement than I’ve felt in a long time.”

The flurry of activity came as anxiety built up in many corners, including among Wall Street investors worried about the effects on the markets and active-duty soldiers worried about their paychecks.

After Mr. McConnell sounded a hopeful note, Mr. Reid called members of the Senate to the floor to hear him dispute the claims by his Republican counterpart and accuse Republicans of failing to enter into serious negotiations even as the Treasury risked running out of money to pay all its bills after Tuesday.

Reporting was contributed by Jackie Calmes, Helene Cooper, Binyamin Appelbaum and Robert Pear from Washington, and Thom Shanker from Kandahar, Afghanistan.

Article source: http://www.nytimes.com/2011/07/31/us/politics/31fiscal.html?partner=rss&emc=rss

Speak Your Mind