Senate leadership wants distance from deficit discussions

Senate leadership wants distance from deficit discussions

Democratic and Republican leaders in the Senate on Tuesday sought to distance themselves from deficit talks being held by a small, bipartisan group of lawmakers. 

The swift pushback, delivered by aides, came after The New York Times reported in a front-page, above-the-fold story that Senate leaders were closing in on a deal to avert the so-called “fiscal cliff.” 

The leaders’ move to keep those discussions at arm’s length underscores the difficulty of reaching a bipartisan agreement on taxes and reducing the deficit.

Senate leaders believe that any preparation by lawmakers in advance of November’s election could be helpful, aides from both sides of the aisle said Tuesday.

But leadership is not endorsing any ideas being floated by members of the Senate’s Gang of Eight, a group searching for the elusive grand deficit bargain.

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Don Stewart, a spokesman for Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell sees Ohio in play as confidence about midterms grows   Giuliani: White House wants briefing on classified meeting over Russia probe GOP senators introduce Trump's plan to claw back billion in spending MORE (R-Ky.), said, “While the leader has encouraged Republican members to seek solutions, and is aware that many members are discussing potential solutions, these efforts are still in the early stages and he has not endorsed any particular effort over another.” 

Lawmakers and aides say that real negotiations on how to deal with the fiscal cliff can’t begin until after voters decide who will control the White House and Congress next year.

Gang of Eight members, for instance, have said that a win by GOP nominee Mitt Romney would sink their lame-duck ambitions. Romney indicated earlier this year that if he wins, he does not want Obama and Congress to make major decisions before he is sworn in to office. 

The gang is contemplating a three-part plan to replace the $109 billion in across-the-board spending cuts and raft of tax increases — estimated to be worth $536 billion by the nonpartisan Tax Policy Center — that would be implemented around the end of the year.

That plan is favored strongly by retiring Senate Budget Committee Chairman Kent Conrad (D-N.D.), but the structure of it has not been agreed to by the Gang’s Republicans. 

Conrad is pushing a three-part outline: first, avoid the fiscal cliff with a “down payment” of cuts and revenue, then instruct committees to come up with roughly $4 trillion in deficit reduction that would be guaranteed a Senate floor vote.

If the committees failed to act, a new “punishment” would be put into place — a structure similar to the 2011 debt-ceiling deal that created the supercommittee and paved the way for the looming automatic spending cuts.

Conrad has said the new deal would fall back onto a “balanced” plan like the one put forward by President Obama’s fiscal commission — not the across-the-board cuts as outlined by the looming sequestration.

The trigger would not be, Conrad said recently, “something so bad that nobody could live with it.”

Instead, he said, it would be a backup plan “to help you achieve the result necessary.”

Senate aides on Tuesday also made clear that the two parties continued to have stark divides on both the tax side — including over whether to retain all or just some of the Bush-era tax rates — and entitlement spending.

Stewart, for instance, stressed that McConnell would lean against any plan, like the Bowles-Simpson proposal, that raises taxes.

“He does not believe that raising taxes should be considered a solution to an out-of-control spending problem,” Stewart said. “And remember, until there is legislative text and a [Congressional Budget Office] score, it will be impossible to form an opinion on the merits of any particular proposal.”

Democrats were equally cool to the talks.

One senior Democratic aide said “nothing has buy-in from leaders at this point except to support the idea of people continuing to talk.”

Senate Majority Leader Harry ReidHarry Mason ReidMcConnell not yet ready to change rules for Trump nominees The Hill's Morning Report — Sponsored by CVS Health — Trump’s love-hate relationship with the Senate Trump to press GOP on changing Senate rules MORE (D-Nev.) has said he wants a “big” deal in the upcoming lame-duck session that would put a multitrillion-dollar dent in the national debt.

But Reid also signed a letter last month with other Democrats that opposed using Social Security cuts in any debt deal. Meanwhile, Bowles-Simpson, the proposed Gang of Eight fallback, calls for cuts in Social Security benefits, and reins in other entitlement spending as well. 

Reid disparaged the work of the gang of lawmakers last November, dismissing it as “happy talk” that had not been put into legislative language.

“If someone has a proposal about reducing the deficit, the debt, here’s my suggestion: Put it in bill form, in writing, not all these happy statements about what people think can be done,” Reid told reporters at the time. “I’m stunned by the Gang of Six that we hear so much about.”

Senate Majority Whip Dick DurbinRichard (Dick) Joseph DurbinTrump has exposed Democratic hypocrisy on prison reform House easily passes prison reform bill backed by Trump This week: House GOP regroups after farm bill failure MORE (D-Ill.), Conrad and Sens. Mark WarnerMark Robert WarnerThe Hill's Morning Report — Sponsored by PhRMA — The art of walking away from the deal Giuliani: Trump asked White House lawyer to go to Russia briefings Top Intel Dems denounce presence of Trump lawyer at classified briefings MORE (D-Va.), Saxby ChamblissClarence (Saxby) Saxby ChamblissLobbying World Former GOP senator: Let Dems engage on healthcare bill OPINION: Left-wing politics will be the demise of the Democratic Party MORE (R-Ga.), Tom CoburnThomas (Tom) Allen CoburnMr. President, let markets help save Medicare Pension insolvency crisis only grows as Congress sits on its hands Paul Ryan should realize that federal earmarks are the currency of cronyism MORE (R-Okla.) and Mike CrapoMichael (Mike) Dean CrapoOvernight Finance: Trump signs Dodd-Frank rollback | Snubs key Dems at ceremony | Senate confirms banking regulator | Lawmakers lash out on Trump auto tariffs Trump signs Dodd-Frank rollback Overnight Finance: House sends Dodd-Frank rollbacks to Trump | What's in the bill | Trump says there is 'no deal' to help ZTE | Panel approves bill to toughen foreign investment reviews MORE (R-Idaho) made up the original Gang of Six. Sens. Mike JohannsMichael (Mike) Owen JohannsMeet the Democratic sleeper candidate gunning for Senate in Nebraska Farmers, tax incentives can ease the pain of a smaller farm bill Lobbying World MORE (R-Neb.) and Michael BennetMichael Farrand BennetSenate Dems to Mnuchin: Don't index capital gains to inflation GOP, Dem lawmakers come together for McCain documentary Overnight Health Care — Sponsored by PCMA — Trump official won't OK lifetime limits on Medicaid MORE (D-Colo.) have bumped the Gang’s numbers up to eight.

The negotiating group has not expanded any further, sources said, although a wider group of centrists keeps tabs on their activities. This group includes defense hawks worried about the sequester, including Sens. Lindsey GrahamLindsey Olin GrahamRetired English teacher corrects letter from Trump and sends it back to White House Graham: Trump 'probably' shouldn't call use of FBI informant 'spygate' Graham on canceled summit: Trump thought North Korea was ‘playing him’ MORE (R-S.C.), Joe Lieberman (I-Conn.) and Lamar AlexanderAndrew (Lamar) Lamar AlexanderOvernight Health Care — Sponsored by PCMA — Abortion rights group plans M campaign to flip the House Senate health committee to hold hearing on Trump drug pricing plan Overnight Health Care — Sponsored by PCMA — VA reform bill heads to Trump's desk MORE (R-Tenn.).

The Gang of Eight has been unable to nail down the key ingredients of its plan and might not be able to until after the election. While the Gang’s members have set a $4 trillion goal for deficit reduction, they have not singled out a budget baseline, nor the scope of entitlement reforms. 

“There is not anything completed for leaders to distance themselves from,” a Senate aide said. 

Like Reid, influential conservative activist Grover Norquist has mocked the Gang for its lack of specifics.

Meanwhile, Senate Finance Committee Chairman Max BaucusMax Sieben BaucusClients’ Cohen ties become PR liability Green Party puts Dem seat at risk in Montana Business groups worried about Trump's China tariffs plan MORE (D-Mont.) has been preparing for the post-election deficit debate by trying to develop plans of attack under different electoral scenarios.

Baucus meets regularly with officials like House Ways and Means Committee Chairman Dave Camp (R-Mich.) and Treasury Secretary Timothy Geithner, and has gotten together recently with Federal Reserve Chairman Ben Bernanke and Christine Lagarde, the head of the International Monetary Fund. 

Aides say they believe lawmakers will be able to hit the ground running come November, given the amount of deficit discussions that have occurred in recent years.

In addition to the failed supercommittee and Bowles-Simpson, President Obama and House Speaker John BoehnerJohn Andrew BoehnerJim Jordan as Speaker is change America needs to move forward Paul Ryan’s political purgatory Republicans fear retribution for joining immigration revolt MORE (R-Ohio) tried to reach a broad deal last summer, while Vice President Biden has also led deficit talks. 

“We won’t just be coming into this blind,” a Senate GOP aide said.

— This story was updated at 10:19 a.m.