Biden deficit group gives itself July 1 deadline

The six lawmakers are aiming to either reach an agreement or decide their differences are too substantial to reconcile.

Six lawmakers led by Vice President Joe Biden and charged with developing a deficit-reduction plan met for the third time this week and agreed on Thursday to give themselves until July 1 to come up with an agreement or decide not to continue. Whether or not to raise taxes remained a key sticking point.

"The idea is that we would either reach an agreement in principle by then or recognize that we are not able to bridge our differences," House Budget Committee ranking member Chris Van Hollen, D-Md., a member of the group, said on his way out of the meeting.

While few observers believe the negotiators can cut a deal by July 1, the talks are ramping up with the clear intention at making progress before then.

Biden said staff will be working "around the clock" next week.

He also said Democrats have made it clear they will consider GOP-favored cuts if Republicans will agree to some revenue increases. If Republicans can agree on revenue, a priority for Democrats, he said, "We are prepared to agree to some of the things you want in discretionary spending."

The group appears to have agreed on noncontroversial parts of the budget, but those parts are contingent on agreement on more divisive areas, Van Hollen and Biden said.

The group is set to meet three times again next week, but for three hours instead of two. And Biden said the group might meet four times. The deficit-reduction plan is needed in order to win enough congressional support to raise the debt ceiling by August 2, when the Treasury Department said it would exhaust its borrowing authority.

Republicans and Democrats remain at odds over including taxes in the plan. Republicans oppose raising taxes as a way to reduce the deficit and are more focused on limiting spending. But Democrats, who are in agreement on including spending cuts, also want tax increases, like closing special-interest tax loopholes, to be part of a deficit-reduction package.

Van Hollen said the focus of Thursday's meeting was non-health mandatory programs, such as farm subsidies.

"Today we spent a lot of time refining ideas for saving funds; it wasn't necessarily a huge amount of dollar savings on every one thing, but the details are important when you are making policy changes," Van Hollen said. "We have a long way to go here before we resolve the toughest issues."

Van Hollen added: "We've made progress on [looking for savings in non-health mandatory programs], but any progress on that is contingent on resolving other issues down the road."

Biden said there are differences that are going to "be bridged, it won't occur until the end." He said negotiators "have gone through all the discrete elements of the budget and we've said 'OK if we have an agreement on everything, we agree on this piece.' "

"The really tough stuff are the big ticket items, and philosophically big-ticket items," Biden added, citing as an example health care-related spending. "If we can get an agreement on military, we are prepared to do more."

He said both sides are informing the other of the political issues they face. "We understand Republican pressures," Biden said. "They understand Democratic pressures."