Both parties in Congress are discussing fallback plans for $60 billion to $100 billion in deficit reduction to avert larger spending cuts and tax increases that could trigger a recession in 2013, according to several congressional aides.
With Republicans including House Speaker John Boehner saying a broad tax-and-spending deal after the Nov. 6 election probably can’t happen, the two parties are separately discussing a down payment to replace at least half of $110 billion in automatic spending cuts set to begin in January, said the Democratic and Republican aides.
The Democratic and Republican congressional aides say a $60 billion down payment on spending cuts may be the largest amount they can come up with this year, and the minimum needed to calm concerns by the nation’s creditors that Congress and the president are incapable of addressing the budget deficit.
Last week, a bipartisan group of U.S. senators that has worked on the issue for almost two years finished a three-day retreat at Mount Vernon in Virginia with no sign of progress. The Democratic and Republican aides said little or no bipartisan work is being done by the committees governing taxes and entitlements.