With an August 2 deadline looming, the House and Senate are cutting their congressional recess short this week to continue negotiations on the nation's deficit. And as Democrats and Republicans try to reach a deal, the New York Times reports that the Obama administration is offering to cut tens of billions of dollars from Medicare and Medicaid as part of those ongoing talks. The Times says the money would come from health care providers without directly imposing new costs for patients and radically changing the programs. However, the depth of the cuts depends on whether Republicans are willing to accept any increases in tax revenue. And regarding that revenue discussion, the cover of today's Wall Street Journal reads "Deficit Talks Focus on Taxes." The Journal says that Republicans are at odds with Democrats as they float ideas that could raise tax revenue by some $400 billion over the next decade. Republican leaders say they don't want increases but this past weekend, some members of the party seemed more open to eliminating tax breaks. Texas Republican Senator John Cornyn says lawmakers should close some loopholes and eliminate tax breaks as part of a larger effort to cut rates. However, he also cautions it may be too late to add this to a budget deal.
Senator John McCain rejected the idea of tax increases but like Senator Cornyn, he did not dismiss accepting some "revenue raisers", an idea proposed by fellow Arizona Senator John Kyl. He said, " The principle of not raising taxes is something we campaigned on last November and the results of the election was that American people didn't want their taxes raised and they wanted us to cut spending."
Meanwhile, Democratic Senator Kent Conrad is expected to announce his budget plan as early as this week. Conrad says the proposal would cut more than 4-trillion dollars from the deficit.