Vice President Joe Biden is mediating talks by congressional leaders on… (J. Scott Applewhite, Associated…)
Reporting from Washington — Vice President Joe Biden said budget talks with congressional leaders had identified at least $1 trillion in possible federal spending reductions — about half the amount Republicans have indicated would be needed for their vote to raise the nation's debt limit.
But in a sign of the continuing partisan struggle, Biden also said Tuesday that new revenue must be part of any deal, a concept the GOP has resisted. He added that changes to "big ticket" programs, including Medicare and Medicaid, would be needed too.
"If we keep on this pace, we can get to a relatively large number," said Biden, who has been mediating talks between congressional Democrats and Republicans.
Republicans also said talks were progressing.
The nation will hit its $14.3-trillion borrowing capacity by Aug. 2. If Congress fails to raise the cap, the government is likely to default for the first time — with potentially disastrous consequences, experts say. To cover federal obligations past the 2012 election, the debt cap must rise by $2 trillion, according to estimates.
Republicans have refused to approve new debt authority without dollar-for-dollar spending reductions. Budget experts said an agreement on $1 trillion in spending cuts is feasible, but reaching $2 trillion would be politically difficult.
Still, both sides praised the progress.
"I am confident that we can get to over $1 trillion in immediate cuts," said Rep. Eric Cantor (R-Va.), the majority leader representing House Republicans in the talks. "And I reiterated that tax increases cannot pass the House."
There is wide agreement in Washington that deficits must be reduced by $4 trillion over the next decade, and President Obama has made such a proposal. Biden said an agreement for $1 trillion in cuts would be a "down payment."
Democrats have proposed closing tax loopholes to reduce deficits, but Republicans oppose such measures. Biden said negotiators would have to agree on how to "get to the $4 trillion."