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Top Democrat Reid criticizes Republican-White House budget talks

U.S. Senate Majority Leader Harry Reid, (D-NV) speaks to reporters after Senate luncheons as he is accompanied by Sen. Jeff Merkley, (D-OR)
U.S. Senate Majority Leader Harry Reid, (D-NV) speaks to reporters after Senate luncheons as he is accompanied by Sen. Jeff Merkley, (D-OR)

By David Lawder

WASHINGTON (Reuters) - Senate Democratic leader Harry Reid said on Tuesday he was "disappointed" with budget talks between Republican senators and the White House, saying President Barack Obama has offered concessions while Republicans refuse to budge.

The discussions have been the only significant channel for communications between the White House and congressional Republicans on the budget in recent weeks as the government faces a possible shutdown if a deal can't be reached by September 30.

Thus far the group, led loosely by Georgia Republican moderate Johnny Isakson and numbering as high as 25, has mainly tried to persuade White House Chief of Staff Denis McDonough and other top officials that the budget solutions should be designed to tame deficits over a 30-year period, rather than the traditional 10-year budget window used by Congress.

The Republican senators say this would require deeper cuts to expensive federal benefits programs for the elderly, which grow exponentially in the 2020s and 2030s as the massive Baby Boom generation retires in force.

Reid complained that the Republican group had not offered any specific proposals and wasn't working with Senate Democrats to replace automatic "sequester" spending cuts or resolve other budget differences.

"I've been disappointed with the meetings the Republicans have had with the president. The last one, as I understand it, was yesterday," Reid told reporters on Tuesday.

"All they talk about is, Mr President, what are you going to do?" Reid said. "He's already done things a number of people in my caucus, they're not wild about. But he's put forward his proposal. The Republicans refuse to come up with anything in writing."

Obama has offered Republicans a change in the way cost-of-living increases are calculated, using a less-generous measure of inflation, but has demanded additional tax increases on the wealthy. Many Democrats have balked at the proposal because it would effectively reduce Social Security payments to seniors in future years.

TAX REVENUE ROADBLOCK

McDonough and other members of Obama's economic team are continuing to meet with the Republican group, which also includes Senators Kelly Ayotte, John Hoeven, Lindsey Graham, Bob Corker, John McCain and Tom Coburn, a senior administration official said.

The official said the talks would continue, despite not yielding any results so far. To date the Republican senators have not offered specific proposals and have not agreed to put revenues on the table.

"Obviously the challenge is that the administration wants $583 billion in higher taxes and that just doesn't work for us," said Hoeven, of North Dakota. "Revenues should come through economic growth, not higher taxes. That's the stumbling block."

He said, however, that Obama's cost-of-living proposal shows there is room for agreement in some areas to reform benefit programs known as entitlements.

A more immediate problem for Congress, however, will be reconciling deep divisions between Democrats and Republicans over spending on discretionary programs ranging from education to the military, and replacing the across-the-board sequester cuts with savings elsewhere.

If these issues can't be resolved before the end of September, the government faces a strong risk of shutting down over lack of funding as the new fiscal year gets underway on October 1.

Time is already running short, as Congress starts a five-week recess on Friday, and has scheduled only nine legislative days in September.

Reid said Democrats were ready to negotiate any size fiscal agreement - "a big deal, a middle-sized deal, any kind of a deal. But you can't do it unless Republicans agree."

On Wednesday, Obama will come to Capitol Hill to meet with Democrats in both the House and Senate to discuss his plans for tax reform, job growth and budget issues.

(Reporting by David Lawder; Additional reporting by Caren Bohan and Mark Felsenthal; Editing by Eric Beech)

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