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Congress: All about debt ceiling and Libya

The two big issues this week: the debt ceiling and Libya. The House is off, so all the action is on the Senate side. Today, President Obama and Vice President Biden meet separately with Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) on the debt ceiling. McConnell will tell Obama that raising taxes has to be off the table, McConnell spokesman Don Stewart tells First Read. Bloomberg reports that “among the tensions the president may confront” in his meeting with McConnell is a $72 billion business tax break that Obama is targeting. The White House sees the “so-called last-in-first-out, or LIFO, provision,” as a loophole. It’s “a method of accounting for inventory costs.”

On Friday, Democrats said for the first time out loud what was already known by most observers -- that they want to cut oil subsidies and raise taxes on the very rich. But it remained unclear by how much. By the way, The Hill notes that Democrats don’t want measures that “raise tax revenue” to be called “tax increases.”

House Minority Leader Nancy Pelosi told CNN that “tax subsidies” have to be on the table. “You can’t cut your way out of the deficit,” Pelosi said, per Bloomberg. “You have to have revenue on the table.”

But McConnell contended on ABC, “Throwing more tax revenue into the mix won’t get us the desired results. And it won’t pass.”

There appears to be at least some wiggle room for Republicans on taxes, but not much. Stewart wouldn't say if raising taxes on those making $1 million a year, for example, is completely off the table. Instead, he said Democrats want hundreds of billions in new revenues and, "You can't get there with the easy stuff," he said.

Not easy for Republicans are defense cuts, but apparently those, too, are on the table, the Washington Post reports. That’s a possibility, says Michael Steel, a spokesman for House Speaker John Boehner (R-OH), who is going to play a key role in the final outcome of a debt-limit deal. “Boehner has always said that there's waste at the Pentagon, just like the rest of the government,” Steel told First Read before adding, “Tax hikes on small businesses are definitely off the table.”

Roll Call outlines the tricky path for Boehner to negotiate something that will “win the backing of the majority of his Conference.”

On Libya, on Friday, the House voted down a resolution that would have authorized continued use of force, similar to one being considered in the Senate and could come up for a vote this week, sponsored by Sens. John McCain (R-AZ) and John Kerry (D-MA). The House also, however, voted down a bill "to limit the use of funds" in support of NATO for the Libya operation.

The Democratic split on Libya was clear on Meet the Press with Sens. Jack Reed (D-RI) and Jim Webb (D-VA). Reed said he'd support Kerry-McCain. Webb, on the other hand, pointed to Senate Foreign Relations Committee Ranking Member Sen. Dick Lugar's (R-IN) five amendments to Kerry-McCain that would limit the president's authority, including not allowing ground troops, peace-keeping, or nation-building there.

Tomorrow, the Senate Foreign Relations Committee holds a hearing on Libya with the State Department lawyers who crafted the administration's argument that it is not engaging in "hostilities." Then the committee is expected to mark up Kerry-McCain. It's not clear yet when it could come up for a full Senate vote.