At a White House meeting Thursday, President Obama will push congressional leaders to think big when it comes to deficit negotiations – embracing both spending cuts and new taxes and sources of revenue that exceed the $2 trillion in deficit reduction over the next decade that both sides have been discussing, though not as much as $4 trillion.
Democratic officials familiar with the negotiations say that the argument can be made that it will be easier politically to pass such a package. A “big deal that puts the country on sound financial footing,” one official said, “will be a big accomplishment.”
One Democratic official familiar with the negotiations said “there does seem to be the energy” and “a pathway” for a bolder package of deficit reduction measures.
“This is not a romantic quest,” said one of the officials, who spoke under condition of anonymity so as to speak freely about an ongoing negotiation. “You can see how this could come together.”
That said, the officials acknowledged that “conventional political consultants” might recommend against any politician voting for such a measure since it would both change Medicare and raise taxes.
The Democratic officials said there were three options on the table. One would be a smaller, short term deficit reduction measure that would require addressing the issue again in 2012, a direction that President Obama does not want to do, and which House Speaker John Boehner, R-Ohio, said cannot pass the House.
A second option would reduce the deficit by the same amount that the Congress would vote to increase the debt ceiling, roughly $2 trillion.
But President Obama, the Democrats said, will push the congressional leaders to seize this moment and go beyond that and try a third option, addressing new revenues and taxes, entitlement spending, defense spending and discretionary spending, putting together a larger package that seriously addresses the deficit and steers the nation towards a more fiscally sustainable path.
“He has made this case individually,” to the congressional leaders, one Democratic official said.
The officials said that the measure needed to be passed by August 2, meaning that by July 22, roughly, a deal would have to be struck so legislation could be written. Asked if in the event of an emergency, the president would attempt to use the 14 th amendment to declare the debt ceiling unconstitutional so as to bypass any economic crisis, one Democratic official jokingly asked if the reporter could “find a way we can wind that through the courts by August 2?”