Debt discussions are set to continue on Monday as lawmakers feel pressure from President Barack Obama to come to an agreement in the next 10 days. As of Sunday, Congressional leaders remained divided over the size and components of the plan, which will ultimately reduce long-term deficits.
Lawmakers Divided on Plan Components
On Sunday, Obama met with eight House and Senate leaders to discuss a debt deal. On that evening, there were still differing ideas on how to handle to manage national debt, which has long surpassed the $14.3 trillion debt ceiling.
Obama has proposed a $4 trillion deal to reduce the debt while House Speaker John Boehner was behind a smaller package that will range from $2 trillion to $2.4 trillion.
The cost of the packages introduced was among the many reasons lawmakers are still at a deadlock on agreements. According to published reports, Republican lawmakers are dead set against deficit reduction packages that contain tax increases, stating that it would be a job killer, especially with the economy suffering 9.2 percent unemployment.
Reports say that despite opposition, Obama is pressing for a larger package. However, he says that if they go with a smaller deal of up to $2.4 trillion, it would still require tax revenues.
Democratic Lawmakers Dislike Medicare/Medicaid Changes
Democratic lawmakers are also having issues with his $4 trillion debt deal. One of the major problems is proposed changes to Medicare and Medicaid.
On the Medicare side, upper-income retirees could see higher premiums. And recipients, with the exception of the poor, could face new copayments and deductibles. Currently, seniors do not face a copayment for home care, but this could change if the big deal is approved.
The administration has also proposed replacing formulas for Medicaid with a single rate each state. It says this could save $50 billion to $100 billion over 10 years. Some think the adjustment could force limits on availability for some recipients.
Experts continue to stress the importance of having the debt plan complete before default occurs on Aug. 2. They say if lawmakers can’t come to an agreement in this timeframe, a severe financial crisis is sure to ensue.
