HELENA — U.S. Sen. Max Baucus said Thursday that he thinks Congress is inching closer to a solution to end the government shutdown and avoid a federal financial default — but said a deal can’t include complex topics like entitlement reform sought by the GOP.
“Maybe they are listening to people at home that have got fed up with the inability of Washington D.C. to get its act together,” the Montana Democrat said. “It really is astounding that the greatest country on earth has shut down its government.”
The Senate Finance Committee chairman heard earlier in the day from the Treasury secretary that failure to raise the debt limit would be “catastrophic” to financial markets and business.
Republicans also opened the door to a short-term extension — but said they want to talk about cuts to the government’s big benefit programs such as Social Security and Medicare.
Baucus said that topic can only be discussed as part of an orderly, longer-term conversation that also includes raising revenue through closing tax “loopholes.”
He said the risks of default — higher interest rates and skyrocketing unemployment — are too great to wait until a complex deal can be reached on longstanding disputes on spending issues.
Baucus introduced a bill earlier this week that extends the debt limit through Dec. 31, 2014, after the mid-term elections. Baucus said that would give plenty of time to discuss spending and taxes.
“I agree, we do need to address the long term spending problems our country is facing,” Baucus said.
But the Democrat said Republicans have to be open to raising revenue as part of the solution to balancing the budget. He said tax collections as a percentage of the overall economy are at an all-time low.
Baucus has spent recent months trying to hatch a bipartisan deal on tax reform. He said there is a “decent chance” that could be part of a longer-term solution.
“In the meantime, it is imperative that the government re-open. It is imperative … so that there is no question that the United States pay its bills,” Baucus said. “I think they should be addressed, but not in the context of are we going to pay our bills or not. Of course we are going to pay our bills.”