Biden talks focus on debt reduction caps

By Russell Berman - 06/15/11 02:44 PM ET

Negotiators in the debt talks led by Vice President Biden met for more than two hours Wednesday, discussing proposals for structural spending reforms.

Rep. James Clyburn (D-S.C.), the assistant Democratic leader, emerged from the meeting saying he was “very optimistic” the group could strike a deal to lift the debt ceiling, and Sen. Jon Kyl (R-Ariz.) pointed to July 1 as a date when the group hopes to wrap up its work.

“We’re getting there,” Clyburn said.

Wednesday’s meeting centered on deficit reduction caps and triggers, Rep. Chris Van Hollen (D-Md.) told reporters. Republicans want caps that are tied exclusively to spending as a percentage of the gross domestic product, while Democrats are pushing to link any caps to the broader goal of deficit reduction, in which both spending cuts and tax increases could be used to rein in future deficits.

Van Hollen said the negotiators “had a useful discussion about different perspectives, and we’re going to continue to work on it.”

He said that while there was broad support for some form of a cap or trigger, differences remained.

“We did not get them resolved,” he said.

The Biden group plans to meet for a third consecutive day on Thursday as it tries to ready an agreement to present to party leadership, President Obama and rank-and-file lawmakers.

The Treasury Department has said Congress must raise the $14.3 trillion debt ceiling by Aug. 2 to avoid a default by the U.S. government.

The group discussed discretionary spending on Tuesday, and aides said there was also talk about extending a payroll tax cut to stimulate the economy. Obama has said the White House is looking at the option, but House Majority Leader Eric Cantor (R-Va.) declined to comment on the issue.

Including a tax cut in the deal could complicate efforts by Democrats to insist that revenue increases be part of the agreement. The No. 3 Senate Democrat, Sen. Charles Schumer (D-N.Y.) reiterated on Wednesday that revenue increases must be included.

Biden left the Capitol without speaking to reporters Wednesday.