Budget

Erskine Bowles, one of the chairmen of President Obama’s bipartisan debt commission, said Thursday that Obama's plan for cutting the deficit is a “solid, responsible plan.”

“The era of deficit denial has to end,” Bowles said after a White House meeting with Obama. “It's over. This is the moment of truth.”

Bowles and former Sen. Alan Simpson (R-Wy.), the co-chairman of the commission who also attended the meeting, offered support for Obama's plan to cut $4 trillion over 12 years, but they said they are waiting to see what the so-called Gang of Six in the Senate offers.

House Budget Committee Chairman Paul Ryan (R-Wis.) said Thursday that House Majority Whip Kevin McCarthy (R-Calf.) has told him the whip count on the 2012 budget resolution is looking strong.

The 2012 budget resolution is due on the House floor on Friday.

"Our whip count is looking really good. McCarthy said this is one of the better whip counts we have had," he said.

Obama's deficit speech appears to have rallied support for it, he said.

"I think the president helped us," he said.

Democratic operatives are painting the Friday vote as the Republican caucus's "suicide note," because the budget would turn Medicare into a type of voucher system for those now under 55 years old. Ryan said that members are comfortable with taking on Medicare after months of presentations on the nature of the problem. 

Ryan said he is not "holding his breath" for any agreement on a budget resolution with the Senate this year. If one does not pass both chambers, the House will simply abide by its budget resolution when crafting appropriations bills, he said.

He said McCarthy is more concerned Thursday about whipping support for the 2011 White House budget deal.

Asked if it will pass, Ryan said, "I think so."

- updated at 12:34 p.m.

Congress will vote to raise the debt ceiling because it has no other choice, according to Treasury Secretary Timothy Geithner.

Geithner refused to even entertain the notion of lawmakers failing to act on the debt ceiling, painting it in an interview Wednesday as an inevitability.

"The Congress will pass an increase in the debt limit, because they have to," he said in an interview with PBS's "NewsHour." "And the leadership of both houses has recognized that the country has to meet its obligations."

Years removed from the worst financial crisis since the Great Depression, no major figures have been prosecuted.

The government's bailout watchdog says the Treasury Department had lax oversight over law firms in its employ.

Former Sen. Alan Simpson (R-Wyo.), who co-led the president's deficit commission, had one reaction to the president's deficit speech: Pray for the "Gang of Six."

U.S. investigators are probing whether banks conspired to manipulate a benchmark interest rate during the financial crisis.

Tax Day tension? Companies across the country are offering enticing deals to ease the pain.

The president delivers a speech meant to drive the budget debate, but Republicans say it's just a campaign pitch.

THURSDAY’S BIG STORY:

After President Obama’s long-term “vision” sucked up much of Wednesday’s oxygen, the deal to fund the government for the rest of this fiscal year will return to center stage for at least part of Thursday.

And as it stands, the GOP could have something of a problem on its hands as lawmakers get set to vote, with the Congressional Budget Office’s scoring of the budget deal now in wide circulation on Capitol Hill. 

CBO points out the spending bill actually only shaves $352 million from the budget by the end of this fiscal year. The deal will lop off $38 billion in spending authority, but much of that comes from what The Associated Press calls “slow-spending accounts.” (Put another way: Reducing the spending authority doesn’t mean you’ll immediately save all that money.)

The comparatively tiny size of the cut will almost certainly make it harder for House leaders to wrangle restive freshmen into backing the deal. The House’s original spending measure for the rest of the fiscal year cut non-emergency spending by $8 billion, compared to the $61 billion touted by Republicans. 

Following President Obama's deficit-reduction speech Wednesday, the former chairmen of the president's fiscal commission urged all sides to "pound out" a deal to get U.S. finances in order.

The call by Erskine Bowles and former Sen. Alan Simpson (R-Wyo.) came after Obama's attacks on House Budget Committee Chairman Paul Ryan's (R-Wis.) budget plan prompted angry reactions from Republicans.

"Now is the time for action. We do not have a lot of time to act to avert fiscal calamity. Our nation's leaders need to put politics aside, pull together, not pull apart, and make the difficult choices needed to bring these deficits under control. All leaders in Washington need to work together to pound out a bipartisan agreement on our long-term budgets," they said in a statement. 

"Between the President's plan, Chairman Ryan's Plan, and the Commission's Plan, there are plenty of good ideas on the table now," they said.

Obama in his speech moved closer to the plan by the fiscal commission. He called for $4 trillion in deficit cuts over 12 years, up from his 2012 budget that called for $1.1 trillion in savings and which was panned by Bowles and Simpson. Their plan would reduce deficits by $4 trillion by 2020.

"We are encouraged that the President has embraced a balanced, comprehensive approach to deficit reduction similar to that outlined in the Fiscal Commission report. We believe that only an approach which includes all areas of the budget can reach the broad bipartisan agreement necessary to enact a real and responsible deficit reduction plan. The framework he put forward today represents another step forward in the process," they said. 
 
Bowles and Simpson said that they hope much of the bipartisan agreement will be based on the Senate Gang of Six, which is working to put the fiscal commission report into law.

The two men are scheduled to meet President Obama and Vice President Joe Biden on Thursday at the White House.

Speaker Boehner said the deficit-reduction plan outlined by President Obama falls far short of the House GOP's 2012 budget blueprint.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) welcomed President Obama's call for administration-led talks on a long-term deficit solution.

Conrad has been saying for months that Obama needs to get in front of the issue and lead a summit with leaders of Congress. Obama on Wednesday asked House and Senate leaders to open talks with Vice President Joe Biden on the deficit in May. The goal would be to have a deficit plan in place by June, shortly before the nation's debt ceiling must be raised.

“President Obama set the right spirit and tone in his remarks today. To solve our long-term fiscal crisis, we are going to have to break through the partisanship and gridlock that has taken hold in Washington," Conrad said.

"Democrats and Republicans must be willing to put aside our differences and find common ground.  We need to sit down together with everything on the table and negotiate a comprehensive, balanced and bipartisan long-term deficit and debt reduction plan. The nation’s strength and security depend on it,” he added.

Conrad has been working with five other senators to put the recommendations of the president's fiscal commission into law. The Gang of Six is trying to come to an agreement on a plan by early May.

A coalition of 46 House Democrats is attacking Republicans for demanding spending reforms in exchange for upping the debt ceiling.