(National Journal) House Speaker John Boehner, R-Ohio, informed fellow House Republicans on Thursday that the chances of congressional leaders and President Obama reaching a tentative debt-ceiling deal within 48 hours are “maybe 50-50.”
That prognosis from Boehner was relayed by several House Republicans as they left a morning briefing with the speaker — and later confirmed by a GOP leadership aide. Boehner and other Republican and Democratic congressional leaders are set to continue negotiations at the White House on Thursday on a deal to raise the nation’s $14.3 trillion debt ceiling.
“I get the impression that it’s better than 50-50,” said Rep. Peter King, R-N.Y. “It will be agreed upon in the next 48 hours; if not, it won’t be for a long time.”
In a separate interview, freshman Rep. Billy Long, R-Mo., also said that he came away from the meeting believing a deal in the next 48 hours is “50-50.”
But if not, he said, there was a sense that negotiations could come unglued. “It will get done quickly, or not for a long time,” said Long.
They and other Republicans, such as Rep. Vern Buchanan, R-Fla., and Trent Franks, R-Ariz., said few specifics were unveiled to them during the conference meeting, although they said Boehner did reiterate that Republicans “aren’t interested in raising taxes.”
Franks, who is one of the most conservative members of the House, said that he understands the squeeze in which Boehner finds himself, having to negotiate such a deal with the president and Democratic leaders while also having to contend with the demands inside his conference.
But Franks said it is his understanding there are clear indications a proposed deal was in the works, and that “I got the sense that, this July 18 work period [recess], that members should carefully consider their scheduling for signs of flexibility.”  (article)
The Nitty Gritty……  Social Security Changes on the Table in Debt Talks – While the political jousting continues, President Obama and congressional Republicans are moving closer to a multi-tiered deal that would include changes in Social Security benefits, tax reform, increases in various user fees, and large-scale cuts in annual spending, according to numerous sources close to the negotiations.
No agreement exists and both sides continue to shadow box even as they move cautiously around the underlying policy and unpredictable political reaction any one or all of these potential shifts might incite. On Social Security, it’s unclear if Obama is willing to raise the retirement age or merely accept changes in inflation-adjustment calculations that would reduce benefits but not alter the program’s basic architecture. Administration officials have said a proposal from Obama’s Simpson-Bowles deficit-reduction commission to raise the Social Security income cap are among the ideas being considered if there is a comprehensive deal in the making.
In the nitty-gritty of negotiations, Republicans have made clear to Obama if he wants to spare domestic “investments” (ie. Obama’s ridiculous spending programs) funded through discretionary spending he need only embrace structural changes to Social Security or Medicare.  Republicans contend altering current benefit schedules would extend solvency for Social Security and put bigger deficit-reduction numbers on the board, giving Obama more room for annual discretionary spending. And both sides are still fighting over how much to cut future defense spending within the context of annual discretionary spending. Democrats want deeper cuts than the GOP and the GOP wants to guard against any legislative bias in favor of defense cuts over non-defense discretionary savings. Like every other issue, much has been discussed and dissected — but nothing has been agreed to.
Obama meets on Thursday at the White House with the bicameral, bipartisan leadership. The session doesn’t appear to be designed to settle matters but to continue the active discussions that have been taking place and improve the atmosphere heading into what all sides agree is a vital five or six days to cut a deal.
Sources involved in the talks say it will require at least 16 to 17 legislative days to pass a bill of the size and complexity now under consideration through Congress. This timeline does not include hours required to draft the bill into legislative language — a process that could last one or two days. This scenario would require working through weekends and the House canceling a scheduled recess for the week of July 18 (already a foregone though unannounced conclusion).
Obama and Congress are trying to beat an August 2 deadline for when the U.S. government runs of out of funds to pay its debts and falls into technical default — which carries with it an unpredictable set of circumstances that could roil domestic and global stock markets, increase interest rates, and bludgeon an already limping economic recovery.
Obama and Congress are seeking a deficit-reduction deal of at least $2 trillion, a target defined by GOP demands that deficit reduction exceed the amount of debt authority given to the Treasury Department. A boost of $2 trillion in borrowing authority above the current $14.3 trillion limit would extend solvency until after the 2012 election — longer if economic growth triggers larger-than-expected revenue flows.
Importantly, none of the thorny issues such as how much to cut Social Security, how high to raise user fees, or how to trade lower income and corporate tax rates for the abolition of corporate tax favors and subsidies have been resolved.  There is general agreements in some areas: Senate Minority Whip Jon Kyl, R-Ariz., said on Wednesday, for example, that Republicans have already agreed to up to $200 billion in higher user fees.
Conservative activists are already getting nervous, fearing Kyl’s user-fee announcement was a trial balloon to gauge reaction with the base.
“At this point, it is unclear what the reported revenue agreement entails,” said Michael Needham, CEO of Heritage Action, the political wing of the conservative think tank Heritage Foundation. “Heritage Action is eager to review the details, including what negotiators mean by ‘user fees.’ Any deal that includes a net tax increase — including a net tax increase disguised as a ‘user fee’ — is totally unacceptable.”
Kyl’s announcement of concessions on user fees could lead to other tax changes under the rubric of tax reform that cuts individual and corporate rates and possibly even rates on capital gains in exchange for wholesale abolition of tax subsidies. It might also lead to changes in the government method of calculating inflation for purposes of benefit allocations and tax brackets.
But talk of tax reform now is premature. Sources with intimate knowledge of the talks say that tax reform would not be drafted and voted on in the debt-ceiling legislation. Instead, there would be a binding commitment from Obama to work with Republicans on seeing implemented an agreed-upon set of tax changes aimed at lowering rates and boosting job growth and economic activity — all designed to boost federal revenue.
A leading proposal in the wide arena of tax and benefit changes, several GOP sources told National Journal, is to adopt the so-called chained CPI. That approach to Consumer Price Index calculations lessens the presumed impact of inflation by calculating how consumers shift buying habits to avoid some higher prices. The change would reduce Social Security benefits and could intensify bracket creep, a phenomenon whereby taxpayers are pushed into higher tax brackets by inflationary pressures rather than actual buying power (a chained CPI would offer less protection from indexing for inflation, thereby exposing some earners to higher taxes).
Switching to a chained CPI arrangement would generate $59.6 billion in revenue from 2012 to 2021, according to the Joint Committee on Taxation. By 2021, the JCT found, more than two-thirds of the revenue would come from taxpayers making less than $100,000 a year — 69 percent of it coming through taxes paid by those with incomes below that amount.
But Republicans insist no new tax increases are on the table or are any increases to existing taxes being discussed. The focus, even GOP sources acknowledge, is on subsidies, preferences, and “spending in the tax code” that benefits one sector of the economy but deprives Treasury of revenue it would collect if the subsidy or preference didn’t exist.
At most, big numbers have been discussed and specific policy changes reviewed. But nothing has been drafted or scored by congressional agencies for review by the leadership, the White House, or rank-and-file Democrats or Republicans. (article)
Obama Says His STAFF Will Work Through The Weekend To Get A Budget Deal Done – RealClearPolitics — President Obama made a brief statement after he met with Congressional Republicans to discuss the debt crisis. Obama said they had a “constructive” and “frank” discussion.
Obama said his staff as well as Congressional staffs will work throughout the weekend to come to a compromise. Obama said a lot of work will be done between now and Sunday, when the two sides will reconvene.
Full transcript of Obama’s remarks:

“I’m going to make a very brief statement. I just completed a meeting with all the congressional leaders from both chambers, from both parties, and I have to say that I thought it was a very constructive meeting. People were frank, we discussed the various options available to us, everybody reconfirmed the importance of completing our work and raising the debt limit ceiling so that the full faith and credit of the United States of America is not impaired.

“What we decided was that staffs as well as leadership will be working during the weekend, and that I will reconvene congressional leaders here on Sunday with the expectation that at that point the parties will at least know where each other’s bottom lines are. And we’ll hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.
“I want to emphasize that nothing is agreed to until everything is agreed to, and the parties are still far apart on a wide range of issues. But, again, I thought that all the leaders here came in a spirit of compromise, in a spirit of wanting to solve problems on behalf of the American people. Everybody acknowledged that the issue of our debt and our deficits is something that needs to be tackled now. Everybody acknowledged that, in order to do that, Democrats and Republicans are going to be required in each chamber. Everybody acknowledged that we have to get this done before the hard deadline of Aug. 2 to make sure that America does not default for the first time on its obligations. And everybody acknowledged that there’s going to be pain involved politically on all sides, but our biggest obligation is to make sure that we’re doing the right thing by the American people, creating an environment in which we can grow the economy and make sure that more and more people are being put back to work.
“So, I want to thank all the leaders. I thought it was a very constructive meeting, and I will be seeing them back here on Sunday. A lot of work will be done between now and then.”

So, they are going to agree to raise the debt ceiling and spend $2 trillion, we do not have, in one year, while agreeing to cut spending by $2 trillion over the next 10 years.   Does that make sense to you?    Its ridiculous.    Extending the borrowing while delaying the cutting only extends the deficit.   Grrrrr.   ugh, ugh, ugh…  No wonder they want to hide their conversations on this behind closed doors….. /SD