White House reportedly offers cuts to Medicaid, Medicare, in deficit talks

Debt-Ceiling, Deficit Talks Push Sides Further Apart

President Obama speaks during a news conference in the East Room of the White House June 29, 2011. (Saul Loeb/AFP/Getty Images)

ANALYSIS
By RICK KLEIN (@rickklein)

WASHINGTON, July 4, 2011

The canceled congressional recess gives the two sides in deficit negotiations more time to talk it out.
But a lack of talk hasn't been the problem. Democrats and Republicans are talking past each other, or, at least, aren't listening to the other side in high-stakes negotiations that might make the unthinkable come to pass when it comes to the nation's debts.
The two sides are moving further apart as the deadline for action on the debt ceiling draws closer. The biggest avenues to shrinking the deficit -– tax increases and cuts to entitlement programs -- are being blocked by Republicans and Democrats, respectively.
President Obama used a news conference last week to cast the fight as a choice between critical services for the vulnerable and tax breaks for the rich. That means more lines being drawn in the negotiating sand, not fewer.
Meanwhile, Sen. John McCain of Arizona -- who opposed the original Bush tax cuts and has often been attacked inside his party for challenging GOP orthodoxy -- summed up the Republican negotiating position on CNN Sunday.

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"The American people, as the president describes it, administered a shellacking," he said of the Democrats' devastating November election losses. "They don't want compromise. They want us to balance the budget.
"They want us to stop mortgaging our children and our grandchildren's futures. And they don't think they need their taxes raised, and I don't either."
The impasse has leading officials in both parties conceding privately that a default on the nation's death is a possible, though not yet likely, outcome. The Treasury Department has said that Aug. 2 is the date when inaction on the debt ceiling will force the United States to begin defaulting on payments owed. Realistically, a deal has to be reached about 10 days earlier than that to ensure that it becomes law in time.More...