Asia-Pacific

$1 trillion on the table in debt talks

(Agencies)
Updated: 2011-05-25 13:17

WASHINGTON – Lawmakers are weighing $1 trillion in deficit-cutting measures as part of a possible deal that would allow an increase in the country's borrowing authority, Vice President Joe Biden said on Tuesday.

Biden's comments were a sign that despite wide skepticism, Democrats and Republicans may be able to hash out a deal that would tame the national debt and give Congress enough political cover to lift the $14.3 trillion debt limit before an August 2 deadline.

"I think we're in a position where we'll be able to get well above $1 trillion pretty quick in terms of what would be a down payment on the process," Biden said after a three-hour meeting on Capitol Hill with top lawmakers.

Republicans have said that any deal to raise the debt limit would have to include spending cuts of equal size.

A $1 trillion "down payment" could allow Congress to back a debt-limit increase which would cover the country's borrowing needs roughly through February 2012. That would require Congress to revisit the politically painful issue before the November 2012 elections.

Democrats and Republicans agree that the United States needs to reduce budget deficits by $4 trillion over the coming decade to ensure its debt remains at a manageable level.

Negotiators are considering deficit-reduction targets that would trigger automatic spending cuts and perhaps tax increases if they are not reached in coming years.

That would give them more time to resolve stubborn disputes over taxes and costly federal healthcare programs that have derailed other bipartisan deficit-reduction efforts.