Vice President Joe Biden voiced optimism on Thursday as negotiations on the U.S. deficit got under way, after Republicans signaled willingness to seek a down payment on cuts but no "grand slam" to slash spending.
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A key battle between Democrats and Republicans in the 2012 election will be how to curb the bloated U.S. budget deficit, but they also must beat an Aug. 2 deadline to raise a $14.3 trillion U.S. debt limit, or risk a damaging default that would shake the world economy.
"We're going to lay down -- not hard negotiating positions -- but let (us) make sure each of us understand where the other guy is coming from," Biden said as he began the meeting with top lawmakers from both parties.
President Barack Obama wants to raise taxes on wealthier Americans and shield cherished social spending like Social Security and Medicare for the elderly, messages central to his campaign to win re-election in 2012.
Republicans, playing on widespread voter anger over the bloated U.S. budget deficit that is expected to reach $1.4 trillion this year, want to keep taxes low and slash spending, including on the healthcare program for the elderly.
But to prevent talks from deadlocking, they said the battle would have to keep until after the election.
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"We're not under any illusion that we are going to get any grand slam agreement," said U.S. House of Representatives Budget Committee Chairman Paul Ryan.
He said Democrats and Republicans were too far apart on how to slow the growth of Medicare and other government-run health programs, and voters would decide whose plan was best in 2012.
Another senior Republican, House Ways and Means Committee Chairman Dave Camp, separately said he back off a controversial plan to privatize Medicare in favor of reaching a compromise on spending that stood a chance of becoming law. The plan would phase in federal subsidies for seniors to purchase plans from private insurers.
Analysts warn the country cannot afford to postpone curbing the growth in entitlement spending.
"I don't think another election is going to help, why should it? If we put this off until 2013 it doesn't get easier, it gets harder," said Alice Rivlin of the Brookings Institution who has sat on several deficit-reduction commissions.
TEA PARTY CHALLENGES
The White House has pitched Biden's negotiations with four Democratic lawmakers and two Republicans as an opening bid from the administration to forge a compromise.
"We welcome any efforts, indications, that parties to these negotiations are searching for common ground," White House press secretary told reporters traveling aboard Air Force One with Obama to New York for a ceremony at Ground Zero.
Biden's group included Democratic Senators Daniel Inouye and Max Baucus, Republican Senator Jon Kyl, House of Representatives Republican leader Eric Cantor and Democratic Representatives James Clyburn and Chris Van Hollen.
A bipartisan group of six senior senators -- the so-called Gang of Six -- is separately pursuing discussions to structure a deal, although they have yet to publish a plan.
The United States will bump up against the $14.3 trillion borrowing limit by May 16, although the Treasury can take steps to keep funding the government until Aug. 2.
With Treasury Secretary Timothy Geithner's predictions of catastrophic consequences in the U.S. and world economy if the debt ceiling were breached, the White House initially urged lawmakers to raise the debt limit without strings attached.
But that call was rejected out of hand by Republicans who won big in congressional elections last year on the promise to end Washington's free-spending ways.
Republicans backed by the conservative Tea Party movement, many of whom are new to Congress, pose a challenge to Senate Minority Leader Mitch McConnell and House Speaker John Boehner. Many have said they are ready to reject the debt ceiling increase unless their deficit-cutting demands are met.