Rising Stakes Spur White House, Congress in Debt Talks as Deadline Looms

Tuesday: Vice President Joe Biden returns to Capitol Hill in Washington for continuing negotiations between Republicans and Democrats in Congress on how to solve America's debt crisis and budget problems. (AP)

The debt reduction talks led by Vice President Joe Biden are in what insiders call "a make or break week," as negotiators try to find $2 trillion or more in spending cuts as part of a deal to increase the debt ceiling.

Treasury Secretary Tim Geithner says the negotiators are getting closer.

"We need to make some progress this week to give everybody more confidence that there's a framework that has the votes,” Geithner said. “You know, ultimately what matters is how do we get the votes to pass something in the House and the Senate."

One of the negotiators, House Majority Leader Eric Cantor, R-Va., indicated the talks are at a critical moment. "It's crunch time now in those meetings,” he said. “We are at some really tough stuff."

Meanwhile, other Republicans have made clear what they see as essential elements in any agreement.

"Entitlements are the biggest drivers of our debt,” noted Senate Republican Leader Mitch McConnell, R-Ky. “By definition, they have to be a part of any plan to lower the debt. This is hardly a controversial view."

To avoid attacks on that as a Republican assault on entitlements, McConnell notes he has plenty of Democratic company, including the Vice President and even President Obama himself.

“To preserve our long-term fiscal health, we must also address the growing costs in Medicare and Social Security,” Obama said to a joint session of Congress soon after he was inaugurated.

And McConnell adds that Biden, the president's lead negotiator in the debt talks, said last January that "everyone talks about we have to do something about Social Security and Medicare, and we do."

Though Geithner didn’t rule out savings from Medicare, Medicaid or the like, he said fundamental reform cannot be done in the next few weeks. Republicans say the same applies to raising revenues in these talks.

However, House Democratic Whip Steny Hoyer, D-Md., said Tuesday, "It's hard to see how you get to $2 or $4 trillion in reductions without revenues or Draconian cuts that Democrats would not support."

But Republicans say any changes, other than savings from ending some subsidies, such as ethanol, belong in entirely separate talks about tax reform.

"Some Democrats are insisting that they'll only agree to cuts if Republicans agree to raise revenue," McConnell said. "That's Washington-speak for tax hikes, and it's absurd."

Secretary Geithner seemed to agree on that one.

"We're not going to resolve in the next few weeks the precise shape of tax reform,” he said. “Not feasible."

The two sides need to agree soon because the last time a major deficit reduction package was produced back in 1997, it took about a month to be drafted, analyzed and voted on. With the government able to operate under the current debt limit only until early August, that means the deadline clock is now ticking louder and louder.