The White House and key lawmakers are considering reductions in student loan subsidies, farm payments, and support for federal workers’ pensions as they search for cuts that can clear the way for an increase in the national debt limit, according to officials in both parties.
The proposals being floated by both sides of the political spectrum differ over key details, but both would involve having interest on their college loans begin to accrue for at least some college students while they are still in school.
The negotiations are still in the early stages, with no final decisions made, these officials said May 18.
While the amounts involved so far are relatively modest, the talks led by Vice President Joe Biden appear likely to assume greater public prominence with the evident collapse of a freelance attempt by the “Gang of Six” senators to produce a sweeping bipartisan plan to reduce red ink.
“We’re talking [about cuts totaling] $200 billion, $150 billion and we have to get up into the trillion range or more,” said Sen. Jon Kyl, R-Ariz., one of six other lawmakers taking part in the talks at Blair House across the street from the White House.
“We have a long way to go if we’re struggling at this level with this amount,” he said, adding that so far, the talks have generally focused on areas of agreement.
The group has yet to discuss military spending or deeper reductions in programs that already were trimmed in legislation that narrowly averted a partial government shutdown in April.
Any discussion about savings from Social Security, Medicare, and possibly Medicaid is likely to be set aside for President Barack Obama and Speaker John Boehner, R-Ohio, to handle.
Treasury Secretary Tim Geithner has said Congress must raise the $14.3 trillion debt limit by Aug. 2 or risk a first-ever government default.