Democrat Murray calls talks with Republican Ryan encouraging

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WASHINGTON — Sen. Patty Murray. D-Wash., said Wednesday she is "encouraged" by her discussions with Rep. Paul Ryan, R-Wis., for a budget agreement and urged the conference committee to "make some compromises."

"Our budgets are dramatically different," Murray said as the conference held its second public meeting Wednesday in Washington. "We need to step out of our partisan corners."

Ryan said he and Murray are discussing the parameters of a deal. "But we're not there yet," he said.

The meeting, which included a briefing by Congressional Budget Office Director Douglas Elmendorf, was the second public gathering of the panel, which is working to bridge differences by a self-imposed Dec. 13 deadline over automatic spending cuts to U.S. domestic and defense programs.

The work could be complicated by a request from House and Senate appropriators to agree on a spending target by Dec. 2.

A major sticking point in reaching any deal, Democrats' demand for revenue increases as part of a deficit-reduction agreement that includes spending cuts, has scuttled previous congressional budget efforts. At the same time, the lobby backing health and financial programs for seniors is pressing lawmakers to resist changes to Social Security and Medicare.

Murray and Ryan are lowering expectations for a bargain to trim the nation's $17 trillion debt. Both lawmakers, chairmen of their chambers' budget committees, have instead focused on replacing the automatic cuts known as sequestration that are reducing funds for education, transportation and medical research.

The panel is running out of time. Rep. Tom Cole, R-Okla, Wednesday said the heads of the House and Senate appropriations committee are asking the panel to agree on a budget as soon as Nov. 22, and no later than Dec. 2 to help avoid a government shutdown in mid-January.

Congress will be in a break starting Nov. 22, making it difficult to meet the request from Republican Representative Hal Rogers and Democratic Senator Barbara Mikulski, head of their chamber's appropriations committees, he said.

"The two bodies are only about $90 billion apart" in their budgets, he said. "We ought to be able to give the appropriators a number."

Taxes became a focus of Wednesday's meeting, with Sen. Rob Portman, R-Ohio, prodding Elmendorf to say that revenues over the next decade are projected to average 18.3 percent of the nation's gross domestic product, exceeding the historical average 17.4 percent.

Sen. Sheldon Whitehouse, D-R.I., countered with a chart showing that for every dollar of tax revenue the government collects 60 cents goes "out the back door" through special breaks and "loopholes."

The two parties aren't close on their fiscal positions. Republicans want to replace the across-the-board cuts with savings from entitlement programs including Social Security and Medicare. Democrats say they are open to ideas as long as they're coupled with revenue increases. Ryan, his party's vice presidential nominee last year, has ruled out revenue increases.

Leading a coalition against scaling back seniors' benefits is AARP, which boasts 37 million members.

"Medicare and Social Security, if not on the table, are always on a side table" and seniors can't let down their guard, David Certner, director of legislative policy for AARP, said in a Nov. 4 interview.

Sequestration led to $80 billion in automatic cuts in March to programs that Democrats consider priorities, including Head Start for poor children and scientific and medical research.

An additional $19 billion cut in Pentagon spending is set to start in January, raising concern among Senate Republicans such as John McCain of Arizona and Lindsey Graham of South Carolina.

In their opening budget conference meeting on Oct. 30, Democrats and Republicans revived their dispute over whether to raise revenue.

_ With assistance from Julie Bykowicz in Washington.