Reid rejects badly needed $2 Trillion cuts

Reporting from Washington— Battle lines in federal debt talks sharpened markedly Thursday when the Senate’s top Democrat rejected a proposal for $2 trillion in budget cuts as demanded by House Speaker John A. Boehner, saying any cuts must be accompanied by action on closing tax loopholes.

“You can’t do $2 trillion just in cuts,” Senate Majority Leader Harry Reid (D-Nev.) said in an interview in his Capitol office. “There has to be a mix of spending cuts, including defense. There has to be a more fair apportionment of tax policy in this country.”
Republicans have resisted using tax reform to rein in deficits as Congress and the White House try to break a stalemate over raising the nation’s debt limit by Aug. 2 to avoid a first-ever federal default. Boehner’s office reiterated Thursday that tax hikes would not be “on the table” in talks.
Reid said negotiations are likely to drag until the 11th hour, a prospect certain to send shudders through the financial markets and fuel political debate.