White House and congressional negotiators are considering a $2.4 trillion rise in the U.S. debt limit to carry through to the end of 2012, which would require at least $2.5 trillion in savings over a decade or more, Republican Senator Jon Kyl said on Tuesday.
Kyl is one of six members of Congress meeting regularly with Vice President Joe Biden to try to work out a spending cut and debt limit deal before August 2, when the Treasury Department says it runs out of tools for managing the U.S. debt without an increase in borrowing authority.
The group's next meeting is scheduled for Thursday.
To go to the end of the year next year you have to do about $2.4 trillion in debt ceiling (increases), which means about $2.5 trillion at a minimum in savings over 10 years or more, Kyl told reporters.
A deal needed to be reached in July some time that could include long-term savings to the Medicare health insurance program for the elderly and disabled, he said.
Kyl, the number two Republican in the Senate, previewed Thursday's meeting by saying there were a couple big things on the agenda.
They (Democrats) want to talk about revenues, we want to talk about spending constraints. We'll probably try to wrap up the items that we've discussed in the past that we didn't complete work on, he said.
Kyl said the Biden-led negotiations needed to make significant long-term savings in Medicare and the Social Security retirement programs.
If we don't create some way to save Medicare, for example, then I think the markets could interpret our results as a failure and go south pretty fast, the Arizona senator said.
But Democrats are balking at Republican ideas for saving Medicare, which include a proposal to privatize the program for future retirees. That has been estimated to cost the elderly about $6,000 a year per person in additional medical costs.
Public opinion polls have shown little support for the Republican idea.
Sources have said the refusal of Republicans to consider increased revenues as part of a debt limit deal leaves Democrats with little incentive to accept Medicare cuts.
Kyl said he did not think Biden's group had the capability or time to include tax expenditure reforms in any deal. That effort, he said, could come later in the year.
Tax expenditures include breaks such as tax-free healthcare benefits provided by employers and mortgage interest deductions.
(Reporting by Richard Cowan and Andy Sullivan; Editing by John O'Callaghan)