Cantor, Kyl Exit Deficit Talks

Two pullouts suggest that the GOP won't negotiate any further until Democrats takes tax increases off the table

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Following on a decision by House Majority Leader Rep. Eric Cantor, (R-Va.),to pull out of the White House-led debt and deficit talks on Thursday, the other Republican negotiator, Sen. Jon Kyl of Arizona, has also dropped out.

The new GOP position appears to be that they will not negotiate any further until Democrats take tax increases off the table. That stance seems to reflect their assessment that there are not the votes in the House to pass any deal that includes tax increases.

Cantor announced suddenly on Thursday that he would not be attending the scheduled afternoon meeting of the bipartisan deficit-reduction leadership group headed by Vice President Joe Biden, declaring tax issues an obstacle that President 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.

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House Speaker John Boehner, (R-Ohio), said when Democrats drop their demand for taxes the talk can continue, and he embraced Cantor's decision. "I understand his frustration. I understand why he did what he did," Boehner said.

And in what appeared to be a coordinated 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 increase and Democrats' insistence that some tax hikes be part of the deal.

"We have to get over this impasse on taxes,'' he said.

There was no immediate reaction from Democratic members on the Biden-led panel, Rep. Chris Van Hollen, (D-Md.), and House Assistant Minority Leader James Clyburn, (D-S.C.), who on Thursday morning were at the White House with Minority Leader Nancy Pelosi, (D-Calif.), meeting with Obama and Biden on the debt negotiations. But at a Senate Finance Committee hearing on health care entitlement programs, Committee 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.

Photo Credit: Larry Downing/Reuters

Earlier this week, Cantor praised Biden for his leadership of the bipartisan debt-reduction group. But he's always said that at some point Obama, House Speaker John Boehner, (R-Ohio), and Senate Majority Leader Harry Reid, (D-Nev.), 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 increases, 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.

Senate Budget Chairman Kent Conrad, (D-N.D.), noted that GOP control of the House means "they have to take some responsibility, too. "Let's get real, let's get honest. This is a spending problem and a revenue problem," Conrad said.