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Greenspan Gives GOP Hope on Debt Limit

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The continuing questions about the urgency of raising the debt ceiling come as administration officials are trying to pressure Congressional lawmakers to forge a compromise. Vice President Joseph Biden signaled Tuesday that he is hoping to bring a framework for a final deal to Congressional leaders by July 1.

Federal Reserve Chairman Ben Bernanke on Tuesday warned again that defaulting on federal debt payments by not raising the limit, even for a short period, would have negative effects on the country's already weak fiscal condition.

Although negotiators from both parties said Wednesday that they are making progress, it is unclear how far along the talks have moved toward a deal. Rep. James Clyburn (D-S.C.) told reporters that while there has been progress, they still are discussing the "form" of the agreement, rather than specific numbers.

Rep. Chris Van Hollen (D-Md.) said House Democrats put a "menu" of special interest tax breaks on the table that could be used for deficit reduction from those benefiting oil companies to tax breaks for private jets. He repeated his hope that support among Senate Republicans for an amendment Tuesday that would have ended ethanol tax breaks could represent a breakthrough that makes a broader deal possible.

Sharing that sentiment, Sen. Charles Schumer, the No. 3 Senate Democrat, said "there are lots of places we can look" for wasteful tax breaks that could cut the deficit, including tax breaks that "send jobs overseas."

The New York lawmaker said Democrats are prepared to negotiate serious spending cuts but have drawn a line in the sand when it comes to Medicare benefits. "We're not going to cut senior benefits," he said. "We're not trading that for anything."

Senate Republican Conference Chairman Lamar Alexander repeated his personal contention that eliminating wasteful tax breaks is a good way to reduce the debt. "I voted for lower food prices and less federal debt," the Tennessee lawmaker said, adding "I'll do it again if I have the chance."

Alexander, however, made his comments at a joint press appearance with House Republican Conference Chairman Jeb Hensarling (Texas), who likewise opposes ethanol but doesn't think the savings should be used to cut the deficit.

"I would want to ensure that we use that money to reduce marginal tax rates," he said, in a position in keeping with anti-tax advocate Grover Norquist's pledge to never raise taxes.

John Stanton and Steven T. Dennis contributed to this report.

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