The L.A. Times is reporting that Nancy Pelosi and Harry Reid spent two hours at the White House Saturday afternoon exploring fall-back positions with President Obama.  The meeting followed a definitive thumbs down from the House on Harry Reid’s Senate bill to raise the debt ceiling.

John Boehner has put forward a plan.  The Gang of Five has put forward a plan.  Harry Reid has invented a plan.   Where is the Obama plan?  Ideas are not pouring out of the Oval Office, as the President sees his role as a sidelined referee rather than the leader of the free world!

The President’s highest-level advisers (Reid and Pelosi) are trying to choreograph Obama’s participation so that he is not further tainted by the economic fires burning wildly around his presidency.  The Democratic strategy is more about crafting a win rather than seriously cutting anything from the federal budget.  Meanwhile, House Speaker John Boehner is gingerly trying to steer his own sensitive majority in the House of Representatives.  Many newly-minted congressmen and women cannot afford to rush to a compromise and look weak to their tax-beaten constituents.  Just the same,  everything is also on the line politically for the GOP.   It is an emotional and defining impasse between two polarized parties, and the futures of taxpaying Americans swing in the balance.   The L.A. Times reveals here the key issues urgently being negotiated behind closed doors:

“The potential deal that was in the works late Saturday would include an agreement to raise the debt ceiling by at least the $2.4 trillion that President Obama had requested without requiring a second round of congressional approval Republicans had sought, according to a Democratic official familiar with the talks who spoke on condition of anonymity to discuss the negotiations.

The deal would cut long-term federal spending in two phases. A first phase would cut about $1.2 trillion over the next decade from federal agency budgets. A second would create a bipartisan panel to propose a further $1.6 trillion in deficit-reduction measures later this year.

If that committee deadlocked, or if its recommendations were not approved, further automatic cuts would be triggered on long-term spending for both domestic and defense programs. An automatic cut in Medicare spending might also be imposed, the official said. Democrats appear to have given up a quest for a trigger that would impose revenue increases, deferring the tax debate until after the 2012 election. Republicans appear to have given up the idea of tying the debt increase to a vote on a balanced budget amendment to the Constitution.”

Read the entire article here.

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Filed under: Economy, Featured, Inside The KC by Sonja Eddings Brown, Jul 31, 2011