Nebraska Congressman Lee Terry says it appears negotiations might go down to the last minute as Congress struggles to reach a deal to raise the nation’s borrowing limit.
Terry says the ongoing, and so far fruitless, negotiations have frustrated Republicans in the US House. He says his caucus demands structural reforms to federal spending before it will accept an increase in the debt ceiling.
“We’re really serious, very serious, that major cuts have to be made to everything but Social Security and Medicare,” Terry tells Nebraska Radio Network.
Social Security and Medicare need reform as well, according to Terry, but he says that will have to come later.
Terry expects the negotiations to bump up against the deadline.
“I think that this is going to have to come down to August 2nd,” Terry says. “It seems to me that the president is going to play the, ‘We need more taxes and we need to spend more for the economy’ all the way to August 2nd.”
There remains room for negotiations, according to Terry, who says that House Republicans could accept some changes to the tax code, even if it means some taxes are raised, as long as it is coupled with deep budget cuts. The Gang of Six proposal contains suggested changes to the tax code with would lower marginal tax rates for individuals and corporations, but eliminate some tax deductions. The net effect would be an increase in federal revenue of approximately $1 trillion. The proposal calls for $500 billion in spending cuts immediately and a total of $3.7 trillion over the next 10 years. Terry says the proposal could become the infrastructure under which a deal can be struck.
Terry says Americans are seeing an ugly process right now, because the negotiations are being played out in front of the media. He believes, in the end, an agreement will be reached.
“I do remain optimistic that a deal will be struck. This is too important,” Terry says. “But there are principles at stake here.”