Dems Hopeful GOP Will Go For 'Grand Bargain' With Deep Cuts

By Kenneth R. Bazinet

Democrats remain hopeful that the GOP leadership will take a massive $4 trillion White House deal that will cut more deeply into the federal deficit than any other offer on the table.

Asked at last night’s 75-minute White House meeting with the bipartsan leaders of the House and Senate whether a deal can be worked out in the next 10 days, President Obama responded,”We need to.”

The congressional leaders will be back at the White House today for more talks a few hours after Obama assembles the White House press corps for a late-morning news conference.

“We came into this weekend with the prospect that we could achieve a grand bargain,” House Democratic leader Nancy Pelosi said in a statement after last night’s meeting. “We are still hopeful for a large bipartisan agreement, which means more stability for our economy, more growth and jobs, and more deficit reduction over a longer period of time.”

But rank and file Republicans, led by the Tea Party Caucus, are holding the line against allowing corporate tax loopholes or any tax increases for the rich to be part of a deal to raise the debt ceiling, before financial markets start going haywire when the U.S. starts defaulting on its debts payments.

“If you draw out the entire scenario of default, yes, of course, you have all of that — interest hikes, stock markets taking a huge hit and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries,” International Monetary Fund chief Christine Lagarde told ABC’s This Week” program.

But even the threat of hurting the Wall Street fat cats that line mostly GOP pockets (though the Democrats get their share too), or disrupting the volatile global financial markets has not been enough to get the GOP to back off its refusal to tap revenue streams to take a bite out of the deficit.

“We have got to be able to deliver on this promise, that we are going to get more cuts that what we raise in terms of the debt ceiling, and make sure that gets done with no tax increases,” House GOP leader Eric Cantor said right before the meeting.”

Brad Dayspring, Cantor’s spokesman, admitted late last night on Twitter that “tax increases that Dems are insisting upon cannot pass the House.” It appeared to confirm Democrats complaints that the GOP leadership was being rolled by its rank and file.

So in an about-face, Republicans are insisting that they want to take a smaller debt reduction framework that cuts around $2.5 trillion that they claim Vice President Biden had offered in his negotiations.

However, Republicans, led by Cantor, walked away from those talks and now seem to be retreating to them in an effort to protect corporate tax loopholes and keep the wealthiest Americans from paying more in taxes.

Democrats scoffed at the pull back, with Senate Democratic Policy spokesman Brian Fallon questioning on Twitter if the Biden deal was so good, “Then why did Cantor quit?”

The proposed cuts in funding come as thousands of government jobs are already being lost, forcing some communities and states to consider raising taxes to pay for basic services.

The taxpayers have watched the federal debt skyrocket under the last two Presidents. The national debt was $5.73 trillion when ex-President George W. Bush took office, but when he left, it was $10.7 trillion, ballooning by $4.97 trillion, according to fact-checking service PolitiFact.

The federal debt now stands at $14.3 trillion under Obama, a result of the Wall Street and auto industry bailouts, a massive stimulus plan, the loss of middle class revenue, and the two wars that cost so much during the Bush administration.

Read more from Kenneth R. Bazinet at The Baz File