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http://www.reuters.com/article/2011/06/15/us-usa-debt-biden-idUSTRE75E3JD20110615

Debt talks test Biden political skills

By Caren Bohan and Tim Reid

WASHINGTON | Wed Jun 15, 2011 11:30am EDT

(Reuters) - Joe Biden's legendary charm might not work this time.

The clock is ticking in talks between the vice president and six members of Congress to prevent a U.S. debt crisis, with the threat of world financial chaos looming if they cannot make a deal this summer.

Progress has been slow as Biden leads negotiations on how Congress can allow the Treasury Department to borrow more than its current limit of $14.3 trillion.

Reaching agreement is taxing the negotiating skills of Biden, who has taken on an increasing role as President Barack Obama's envoy to Congress and who won a reputation as a dealmaker after brokering a tax cut extension last year.

"Biden was chosen because the man does not give up. It's not in his nature," said a veteran strategist with close ties to the Republican leadership. "But are the obstacles too great even for Biden? Sure. Nobody disagrees with that. Both sides are digging their heels in at the moment. Nobody can clearly see the shape of a deal."

If there is no deal, the United States risks defaulting on its debt in August for the first time, ruining the U.S. economic recovery and sending world financial markets into tailspin.

Talks restarted this week with Republicans and Democrats still far apart on how to save trillions of dollars from the budget in order to raise the debt limit and avoid default. Republicans, who have a majority in the House of Representatives, are against tax increases to cover the difference while Obama's Democrats oppose plans to scale back the Medicare healthcare program.

Biden's strategy in the talks so far has been to avoid tackling politically sensitive subjects like reforming Social Security too early in the process.

"To offer an analogy, if you're going to try solve the Mideast peace problem, you don't start with Jerusalem. That's the way he approaches the debt talks," said a senior White House official.

Rather than coming up with its own wide-ranging plan for deficit reduction, the Biden group is trying to mix and match earlier ideas that have been put forward by members of both parties, a presidential commission and a bipartisan task force.

The idea is to find points in common without trying to reinvent the wheel on cutting the deficit.

NEW BOYS IN TOWN

If he can pull off an agreement, Biden, 68, will again prove his worth as a troubleshooter for his boss and perhaps raise the chances of a presidential run of his own in 2016.

The debt deadlock is the latest challenge for a man who has come through a childhood stutter, the death of a wife and baby daughter in 1972, two failed presidential bids and a 1988 brain aneurysm that was so severe that a priest gave him last rites.

Biden was senator for 36 years until 2009 and is famed for his negotiating skills and contacts across party lines.

But a new breed of fiscal conservatives linked to the conservative Tea Party movement now holds sway among Republicans in Congress after last year's midterm elections. Biden may not have the same influence with the younger guns of the opposition.

A Republican strategist questioned whether Biden is hitting it off with Eric Cantor, the House majority leader who wants $2 trillion in spending cuts before approving a new debt limit.

"Does Biden really have the relationships inside that room to make things happen? I'm not sure he does," the strategist said.

Tea Party advocates are willing to default on U.S. debt to put a halt to what they see as out-of-control spending by the Obama administration.

"Joe Biden is an honest broker but I don't think he's in a position to make any decision, any deal," said Rep. Steve King, a member of the Tea Party caucus.

"We're going to have to get a lot closer to the brink before there is any agreement," he said.

No matter what happens at the debt talks, Biden will be on the ticket at the 2012 election, said David Axelrod, senior advisor to Obama's re-election campaign.

Shaped by personal tragedy and economic hardship, Biden's life story plays well with voters in rust-belt swing states like Ohio and Pennsylvania where Obama might struggle alone. Biden's family suffered tough times as his father lost several jobs in the industrial northeast.

Biden has a "gut feeling for hard-working middle-class people. Those experiences were formative in his life and he speaks to them compellingly," Axelrod said. "His rhetoric and his focus are infused with that."

Polls show Obama is favored to win the election against whomever the Republicans nominate.

(Additional reporting by Patricia Zengerle and Thomas Ferraro; Writing by Alistair Bell; Editing by Bill Trott)


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