Budget talks focus on common ground while Medicare stance sparks GOP split

By Philip Rucker and Lori Montgomery,

Lawmakers from both parties opened budget talks with the White House on Thursday with a tacit agreement to focus on areas where they might find common ground that could produce significant savings and to postpone consideration of divisive issues such as higher tax rates and a dramatic overhaul of Medicare.

Democratic and Republican negotiators plan to scrutinize broad areas of the budget for spending cuts, tax breaks and other actions that could save money as they work toward a deal to rein in the spiraling national debt and smooth passage of a bill to raise the legal limit on government borrowing.

Congressional leaders emerged from the talks sounding optimistic that they would reach an accord — reassuring financial markets that Congress would probably approve additional borrowing and prevent the U.S. government from defaulting on its debt.

The apparent harmony at Blair House contrasted sharply with the atmosphere on Capitol Hill, where GOP lawmakers were publicly split on whether to step back from their most far-reaching priorities, including a plan to privatize Medicare in 2022, as part of the negotiations.

Senior Republicans such as Majority Leader Eric Cantor (Va.), Ways and Means Committee Chairman Dave Camp (Mich.) and Budget Committee Chairman Paul Ryan (Wis.), who authored the Medicare plan, all underscored Thursday that a deal with Democrats on Medicare is virtually impossible.

At a policy breakfast sponsored by the journal Health Affairs, Camp said that he would not draft legislation to turn Ryan’s Medicare proposal into law this year, citing Democratic opposition. Nor, Camp said, would he move forward with a GOP plan to repeal President Obama’s health-care law.

“Is the repeal dead? I don’t think the Senate is going to do it, so I guess yes,” Camp told reporters.

Such statements sparked a backlash among conservative Republicans, who said House leaders were ceding too much ground too early in what are expected to be lengthy budget negotiations with Democrats.

Less than three weeks after the House passed his 10-year plan to shave $4.4 trillion from expected deficits, in part by turning Medicare into a private voucher system for seniors, Ryan said he would accept a deal to raise the debt limit in exchange for spending controls and cuts.

“We are under no illusion that we’re going to get everything we’ve always wanted in this one bill, but let’s get a good down payment,” Ryan said after a speech Thursday morning before the American Council for Capital Formation.

About two hours later at a Capitol news conference, House Speaker John A. Boehner (R-Ohio) insisted that the Medicare proposal remained a priority in the negotiations.

“Let me make this clear: When it comes to increasing the debt limit and the need to have reductions in spending, nothing is off the table except for raising taxes,” Boehner said.

Several people present at the talks stressed that neither side took anything off the bargaining table during the first in a series of meetings. Major changes to entitlement programs and the tax code, they said, remain a possibility, however remote.