WASHINGTON — On the eve of crucial debt-reduction talks between President Barack Obama and congressional leaders, a key Republican suggested Wednesday that the GOP could be open to an agreement to limit some tax breaks, the topic that so far has blocked efforts to reach a deal.
Nonetheless, no breakthrough between the two parties appeared imminent, as House Majority Leader Eric Cantor, R-Va., also said any revenue-raisers had to be offset by tax cuts.
Meanwhile rank and file congressional lawmakers engaged in more angry, divisive partisan sniping over how to dramatically reduce an estimated $7 trillion in deficits over the next decade.
Obama plans to meet with top lawmakers Thursday morning, and the Republicans' refusal to consider revenue-raisers has been the major obstacle to a deal aimed at reducing future deficits by trillions of dollars.
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Wednesday, Cantor opened the door by a small but important crack. Obama has proposed higher taxes on the oil and gas industry, hedge fund managers and corporate jets, as well as limits on deductions for higher-income people. The corporate breaks are often referred to as loopholes.
"I have said from day one, we are not for tax hikes on the American people or businesses, and if the president wants to talk loopholes, we'll be glad to talk loopholes," Cantor said. "We've said all along that preferences in the (tax) code aren't something that helps economic growth overall. But, listen, we are not for any proposal that increases taxes, and any type of discussion should be coupled with ... tax cuts somewhere else," he told a news conference.
Senate Democrats were not impressed with Cantor's remarks.
"The point isn't to get rid of these loopholes simply to pay for new tax breaks elsewhere, it's to do it in a way that contributes to the reduction of the debt," said Sen. Charles Schumer, D-N.Y.
The White House also has been open to an extension of the 2011 payroll tax deduction, which would more than offset closing the loopholes in question — and make deficits deeper. The 2 percentage point cut is scheduled to expire at the end of this year.
Groundwork for Thursday's talks was set in May and June during bipartisan negotiations headed by Vice President Joe Biden that broke down on June 23 when Cantor quit because Democrats insisted on more revenue as part of the deal.
The talks produced what Cantor called a "blueprint where I can envision us proposing and accomplishing over $2 trillion in savings."
Any agreement would be attached to legislation to raise the nation's $14.3 trillion debt limit. If no agreement is ratified by Aug. 2, the government faces default, and the nation faces possible financial-market chaos and a return to recession.
The White House has said that a deal needs to be in place by July 22 to calm nervous financial markets and give Congress time to enact any agreement.
But finding consensus among lawmakers is getting increasingly difficult, as public attitudes of both parties hardened Wednesday. Senators began a debate over a nonbinding measure that called for millionaires to contribute to any deficit-reduction agreement. Democrats said Republicans want to shield millionaires. Republicans said the language was a political stunt that didn't help negotiations.
The meaning of this highly partisan angry mood is unclear.
"We really don't know what's going on here," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan watchdog group.
Is all this a public effort to satisfy powerful constituencies, she asked, while behind the scenes, top officials are ready to craft a compromise? Or is it reflective of hardening positions that could make a deal difficult to get?
"That would put us in deep, deep trouble," she said.
(William Douglas contributed to this article.)
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