Boehner abandons efforts to reach comprehensive debt-reduction deal

People in both parties said talks broke down over tax reform: On Friday, the White House said changes in tax law must not shift the tax burden more heavily onto households earning less than $250,000 a year. After that, suddenly things went dark, said an administration official, speaking on the condition of anonymity to discuss private negotiations.

Some Republican aides said the deal was simply not good enough, in part because Obama refused to cut entitlement programs deeply enough to restore them to solvency. They also complained that, as part of a mechanism to force lawmakers to overhaul the tax code, the president wanted a trigger that would automatically raise taxes if tax legislation was not enacted by the end of this year.

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President Obama is expected to meet with congressional leaders Sunday to continue negotiations about hiking the nation's debt limit. (July 9)

President Obama is expected to meet with congressional leaders Sunday to continue negotiations about hiking the nation's debt limit. (July 9)

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But other Republicans said Boehner had finally realized that he could not sell the tax framework within his party. Many House Republicans, particularly the influential 87-member freshman class, won elections vowing to never raise taxes. At a Thursday meeting at the White House, Cantor said the tax package could not pass the House. And at a Friday morning news conference, every member of Boehner’s leadership team denounced the idea of including tax increases in the debt legislation.

Meanwhile, Republican presidential candidates have been putting additional pressure on Boehner. Rep. Michelle Bachmann (R-Minn.) vowed in her first campaign ad to never vote for any debt-ceiling increase, no matter what provisions were attached to it.

On Saturday, top Republicans offered tepid support for Boehner’s decision. Don Stewart, spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), said McConnell, too, “remains concerned with the Democrats’ unwillingness to take steps to protect entitlement programs from bankruptcy.”

Cantor spokesman Brad Dayspring said in a statement: “The tax increases that the Democrats are insisting upon cannot pass the House and are the last thing Congress should do with so many people out of work. Eric has always believed the Biden group identified between $2 and $2.5 trillion in spending cuts that could represent the framework for an agreement.”

Boehner’s announcement makes the Sunday evening White House summit all the more critical, as Obama, Biden and congressional leaders must quickly formulate a new plan for avoiding default. Senate Majority Leader Harry Reid (D-Nev.) has said a deal must be sealed by the end of this week to leave sufficient time for Congress to pass it.

Though widely hailed as extremely productive, the Biden group also encountered major obstacles. The Biden package so far involves more than $1 trillion in cuts to government agencies, about $200 billion in reductions to Medicare and Medicare, and another $200 billion from other direct-payment programs, such as farm subsidies and federal employee pensions. It would not touch Social Security, in deference to Democratic demands.

The Biden negotiators were stymied, however, over the issue of revenue. Obama had proposed an increase of more than $400 billion, including new limits on deductions for the wealthy and elimination of a raft of corporate tax breaks benefiting hedge fund managers and corporate jet owners, among others.

Cantor and other Republicans refused to consider closing any tax breaks unless they were offset by tax cuts elsewhere. The group was also fighting over Democratic demands for a “firewall” between domestic and military spending that would guarantee that the Pentagon absorbed its share of the fiscal pain.

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