Congressional Republicans abruptly pulled out of debt-reduction talks with the White House on Thursday and demanded that President Obama meet directly with GOP leaders to resolve an impasse over taxes.
With the clock ticking toward an Aug. 2 deadline, senior Republicans said negotiations led by Vice President Biden had ceased making headway as congressional Democrats pressed for as much as $400 billion in new taxes on corporations and the nation’s wealthiest households.
June 23 (Bloomberg) -- House Majority Leader Eric Cantor said he is withdrawing from today's budget talks with Vice President Joe Biden.
Motion graphic: A guide to understanding the federal debt
Running in the red
“We’ve known from the beginning that tax hikes would be a poison pill to any debt-reduction proposal,” Senate Minority Leader Mitch McConnell (R-Ky.) said in a speech on the Senate floor. “Those who are proposing them now either know this or they need to realize it quickly.”
In a joint statement with Sen. Jon Kyl (R-Ariz.), his representative in the talks, McConnell said: “President Obama needs to decide between his goal of higher taxes, or a bipartisan plan to address our deficit. He can’t have both.”
McConnell and House Speaker John A. Boehner (R-Ohio) said the talks could not move forward unless Obama takes taxes off the table. Democrats called the move irresponsible and showed no sign of backing down from the fight.
The campaign arm for House Democrats quickly issued a fundraising letter accusing Republicans of quitting the talks because they “aren’t willing to budge on ending tax breaks for millionaires and billionaires.”
“The only way to make sure we begin to live within our means is by coming together behind a balanced approach that finds real savings across the budget — including domestic spending, defense spending, mandatory spending, and loopholes in the tax code,” Biden said in a statement. “We all need to make sacrifices, and that includes the most fortunate among us.”
Progress made
The breakdown of the talks comes after seven weeks of negotiations that all sides say made real progress toward a plan to restrain the swollen national debt. Biden and six lawmakers from both parties had tentatively agreed to more than $1 trillion in savings and had begun to tackle the toughest issues: Democratic demands for higher taxes and spending cuts at the Pentagon, and Republican demands for sharp cuts to health and retirement programs.
Those issues were never likely to be resolved without head-to-head talks involving Obama, Boehner and other congressional leaders. Thursday’s developments may merely serve to hasten the moment of truth.
“The next phase is in the hands of [party] leaders, who need to determine the scope of an agreement that can tackle the problem and attract bipartisan support,” Biden said. “For now, the talks are in abeyance as we await that guidance.”
Asked what comes next, Boehner said the ball is in the president’s court.
“I would expect to hear from him,” Boehner told reporters, adding that his emissary to the talks, House Majority Leader Eric Cantor (R-Va.), “has made it clear that these conversations could continue if they take the tax hikes out of the conversation.”
Private channels have already been opened between the White House and Republicans on Capitol Hill. Wednesday evening, Obama met with Boehner at the White House, inviting him to follow up “on conversations they had on the golf course on Saturday,” according to White House press secretary Jay Carney. Neither Carney nor Boehner’s office would comment further on the meeting.
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