By Erik Wasson - 05/11/11 12:12 AM EDT
The White House criticized Speaker John Boehner (R-Ohio) on Tuesday for holding hostage a vote to raise the nation’s $14.3 trillion debt ceiling.
White House press secretary Jay Carney said Boehner was being inflexible by refusing to move from his opening position that the nation’s borrowing limit should only be raised with a deficit-reduction deal built on trillions in spending cuts and no new taxes.
“Maximalist positions do not produce compromise,” said Carney, who described Boehner as restating his “starting position” with his New York speech.
The sharp words from the White House came as Vice President Biden met for a second time with a group of lawmakers aiming to reach a deal on raising the debt limit and reducing deficits.
Biden expressed optimism after the meeting and said the group of Republicans and Democrats “agree on a lot” but signaled a long process ahead that might have to be expanded to a wider group.
“We had a really good discussion and we set an agenda for the next meeting. We are making real progress,” Biden said. “Whether we get to the finish line with this group is another question.”
Biden said the group would meet again on Thursday.
“Everybody is being very cordial. All the facts are being laid on the table. We are going through what we agree on, what we disagree on and then we are going to go back after that is all over and figure out what are the big chunks left and whether we can make any compromises,” he added.
President Obama will host a meeting of the Senate Democratic Conference on Wednesday and Senate Republicans on Thursday as part of the deficit-reduction effort. House caucus meetings will be scheduled later.
Senate Finance Committee Chairman Max Baucus (D-Mont.) said afterward that the meeting was “better” than the last one.
“We got down to details and got down to actual programs. It was cordial,” said Baucus, declining to discuss specifics or dollar numbers.
Separately, Obama administration budget director Jack Lew met with Senate Democrats to try to sell them on the need to include a debt trigger as part of the Biden talks. The debt trigger, which Obama proposed in his April deficit-reduction speech, would require spending cuts or tax increases to reduce the deficit.
The proposal has gotten something of a mixed reaction from Democrats on Capitol Hill. Baucus is among those who have spoken positively about the idea, while Sen. Kent Conrad (D-N.D.), the Budget Committee chairman, and others have implied it does not go far enough in battling deficits.
Aside from Baucus, Sen. Daniel Inouye (D-Hawaii), Rep. James Clyburn (D-S.C.), Rep. Chris Van Hollen (D-Md.), Sen. Jon Kyl (R-Ariz.) and House Majority Leader Eric Cantor (R-Va.) attended the talks.
A very cautious Van Hollen said afterward that it was a “positive” meeting, with participants focusing almost exclusively on those issues where the Democratic and GOP budgets overlap.
“We have identified some areas of common ground,” he said. “The major areas of disagreement have not yet been engaged.”
Van Hollen noted that Social Security reform was not included in either party's budget blueprint, suggesting that it likely won't be a part of the Biden-led talks. But the Maryland Democrat declined to pinpoint any other issues the lawmakers have addressed.
“I’m not going to get into particular details,” he said.
Boehner told the Economic Club of New York on Monday that there can be no tax increases to reduce the deficit, and that spending cuts should exceed the amount by which the debt ceiling is raised. The White House has asked for it to be raised by $2 trillion before Aug. 2.
Boehner’s speech was part of an effort by Republicans to win over Wall Street. Sen. Charles Schumer (N.Y.) and other Democrats have said Republicans risk hurting financial markets with their position on the debt ceiling.
Cantor, who rang the opening bell at the New York Stock Exchange on Tuesday, hit back at Schumer. He said he had spoken with Wall Street traders and financial analysts who told him to “hold the line of cutting spending” and “don’t give in.”
“I heard so much to the contrary in his hometown of New York City today, yesterday, that I just question that,” Cantor said of Schumer’s warning.
Republicans and Democrats are bitterly divided over how to reduce deficits, with the GOP insisting on no tax hikes.
Senate Minority Leader Mitch McConnell (R-Ky.) reiterated Tuesday that Senate Republicans want the discussion to be about trillions in cuts, and said the discussion cannot include tax increases.
But Kyl, the Senate minority whip, suggested some flexibility on the size of spending cuts.
Kyl told reporters that the $6 trillion in spending cuts in the House budget was a good place to start, but that it is not a flat demand that must be met to raise the debt ceiling.
Democrats, meanwhile, made clear that Social Security reform should not be a part of the deficit-reduction discussion.
Baucus, the chairman of the Senate Finance Committee, said during a hearing Tuesday that Social Security “does not necessitate rushed or severe action.”
Senate Majority Leader Harry Reid (D-Nev.) made a similar point Tuesday. “Social Security has not contributed one dime to the deficit,” Reid said.
In response, Sen. Lindsey Graham (R-S.C.) said that if Democrats take Social Security and Medicare off the table, the parties “won’t have much to talk about” in the Biden discussions.
Alexander Bolton, Molly K. Hooper, Mike Lillis and Bernie Becker contributed.