It's like déjà vu all over again. Washington is stuck in neutral at the crossing as the debt ceiling train comes barreling down the tracks. After a week of closed door meetings, press conferences, interviews, and posturing - there has been virtually no progress on the big issue - can Congress raise the debt ceiling before the federal government runs out of money on August 3rd?
President Obama told CBS's Scott Pelley that social security checks could be one of the vital government services that simply won't happen if the government can't pay its bills. The White House and most in Congress see real economic fears from a default and the world's rating agencies, such as Moody's, have warned that a downgrade in the nation's pristine credit rating could happen just because Congress can't get a deal done.
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Senator Richard Durbin, the number two Democrat in the Senate, laid out his party's vision for one of the biggest sticking points in the negotiations so far, taxes. "If we can't eliminate what clearly are loopholes that are indefensible at this time in our history, for example, that we are continuing to subsidize oil companies when they are realizing record- breaking profits in the history of American business, makes no sense," he said speaking on the Charlie Rose Show this week.
During the interview, he handicapped the state of negotiations: "I think it's possible to cut spending. I think we can do that. There's a point beyond which I'm very concerned about the impact on some programs, and I think there are savings we can make in mandatory programs which is another section in the budget. But it's very difficult to reach the target the Republicans are now saying $2.5 trillion or $2.6 trillion to match the extension of the debt ceiling if you don't bring in entitlements and revenue. And since they won't bring in revenue, there's no appetite to discuss entitlements on the Democratic side."
But one new member of the Senate Republican party struck back at the idea of any new taxes. Marco Rubio, who was elected in November riding a wave of tea party support, said raising taxes is not sensible policy.
"If someone in Washington has a tax increase that helps create jobs, then now is the time to offer it. I would submit to you you're not going to find one because there are no tax increases that will create jobs. And if you don't create jobs and you don't grow this economy, there is no way out of this debt. You cannot cut your way out of it and you certainly can't tax your way out of it," he said on the Senate floor.
But Rubio says that there is a need and a desire for reforming the tax code, saying "Our tax code is broken. There are a bunch of things in the tax code that do not belong there, and I think there is bipartisan support, whether the media tries to ignore it or not, I think there is bipartisan support in the Senate, in the House, in Washington for tax reform."
For his part, Oklahoma Senator Tom Coburn has been a key Washington player on the issue of the debt and deficits as well as a proponent of tax reform. Along with Durbin, Coburn was a member of the president's bi-partisan fiscal commission and both voted for the group's proposal to cut $4 rrillion in spending over the next decade.
Coburn has also taken on Republican orthodoxy over taxes, calling for the closing of some corporate loopholes, including billions of dollars in annual support to the ethanol industry. He was recently was a member of the Senate's own bipartisan group, the Gang of Six, who tried to reach consensus on their own spending plan. But next week, he'll unveil his own plan, which he says will achieve over $9 trillion in deficit reduction.
After weeks of discussion, can Washington act? Will the debt ceiling be raised and will a grand bargain be cut to raise the debt ceiling, but cut spending at the same time? Will corporate tax loopholes be closed or taxes raised as part of the plan? Will any such plan pass the Democratic controlled Senate and the Republican controlled House? Or will Congress have to adopt a backup plan that raises the debt ceiling, with no cuts now, only to see the issue remain in the forefront for the next two years?
The politics and the reality of debt and deficits as Senators Durbin, Coburn and Rubio join Bob Schieffer to Face the Nation this Sunday.
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