President Obama and congressional leaders look set to take over deficit-reduction talks after GOP participants in negotiations led by Vice President Joe Biden dropped out on Thursday.
In a news conference, Senate Majority Leader Harry Reid, D-Nev., said the haggling will now fall to leadership and Obama.
The issue "is now in the hands of the speaker, the president, and … me," Reid said.
Reid was reacting to a decision by House Majority Leader Eric Cantor, R-Va., to pull out of the White House-led debt and deficit talks on Thursday, and the subsequent decision by Senate Minority Whip Jon Kyl, R-Ariz., to also drop out, aides said.
House Speaker John Boehner, R-Ohio, used Cantor's exit to insist that talks can resume if Democrats agree to take any tax increases off the table.
That stance reflects a belief among GOP House leaders that there are not the votes in the House to pass any deal that includes tax increases, House and Senate leadership aides said.
Cantor announced suddenly on Thursday that he would not be attending the scheduled afternoon meeting of the bipartisan deficit-reduction leadership group headed by Biden, declaring tax issues an obstacle that Obama needs to help resolve, and that he believes it is time for the negotiations to move to a higher level. "Given this impasse, I will not be participating in today's meeting and I believe it is time for the president to speak clearly and resolve the tax issue. Once resolved, we have a blueprint to move forward to trillions of spending cuts and binding mechanisms to change the way things are done around here," Cantor said in a statement.
Senate Minority Leader Mitch McConnell, R-Ky., on Thursday also attacked Obama for not playing a more prominent role in deficit-reduction efforts. “He’s in charge,” McConnell said in a morning floor speech. “I think most Americans think it’s about time he starts acting like it. It’s not enough for the president to step in front of a microphone every once in a while and say a few words that someone hands him to say about jobs and the economy.”
Although Cantor said he would not be attending Thursday's talks, he remained optimistic about the prospects for a deal. He said the Biden group has made significant progress and has tentatively identified more than $2 trillion in spending cuts over the next 10 years. But he said there could be no agreement on an overall package without breaking the stalemate created by Republicans' refusal to accept any tax increases and Democrats' insistence that some tax hikes be part of the deal.
"We have to get over this impasse on taxes,'' he said.
Rep. Chris Van Hollen, D-Md., and House Assistant Minority Leader James Clyburn, D-S.C., on Thursday morning were at the White House with Minority Leader Nancy Pelosi, D-Calif., meeting with Obama and Biden on the debt negotiations. Speaking to reporters on the Hill after the meeting, Van Hollen said, "People are playing with fire and really putting the fragile economy in jeopardy."
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At a Senate Finance Committee hearing on health care entitlement programs, Finance Chairman Max Baucus, D-Mont., said he was disappointed at the development. "I think Majority Leader Cantor is wrong. I think he should stay at the table," Baucus said, adding that he "very strongly" believed there needed to be revenue increases in any deficit package to get savings from health programs.
Earlier this week, Cantor praised Biden for his leadership of the bipartisan group. But he’s always said that at some point Obama, Boehner, and Reid would have to step in and finalize any plan. Boehner has said that he and Obama would have to step in at some point—suggesting that the panel needed to conclude its work by the end of June.
House Republicans have been steadfast in saying that tax increases are the one area of discussion they consider off the table in the negotiations. The Treasury Department has said that the nation’s $14.3 trillion debt-limit borrowing capacity must be raised by August 2 or the country faces defaulting on its debts.
“Democrats continue to insist that any deal must include tax increases,” Cantor said in his statement. “There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation.”
Cantor went on to say the bipartisan panel has been successful in identifying “trillions in spending cuts, and to date, we have established a blueprint that could institute the fiscal reforms needed to start getting our fiscal house in order.” But he said regardless of the progress that has been made, the tax issue must be resolved before discussions can continue.
Cantor’s move also comes after Reid said on Wednesday that he has called for stimulative measures to be part of the deficit-reduction measures. But he would not identify what those measures would be.
A Senate Democratic leadership aide characterized Cantor’s move as a refusal to sign on to a deal with tax revenue involved. "Eric Cantor just threw Boehner under the bus,” the aide said. “This move is an admission that there will be a need for revenues, and Cantor doesn't want to be the one to make that deal."
On the Senate floor on Thursday morning, McConnell also attacked suggestions that negotiators in the talks could trade concessions on entitlement reform for those on new tax revenue. “The suggestion here is that this is all just some big quid pro quo exercise between the two parties,” he said.
This article appears in the June 23, 2011 edition of National Journal Daily PM Update.