Republicans bail on budget talks, blame Democrats

House Major­ity Leader Eric Can­tor of Vir­ginia returns to his office in the Capi­tol fol­low­ing a series of votes on the House floor, Thurs­day in Wash­ing­ton, D.C. Can­tor, who has been par­tic­i­pat­ing in bipar­ti­san bud­get talks headed by Vice Pres­i­dent Joe Biden, pulled out today cit­ing an impasse over taxes that he says requires inter­ven­tion by Pres­i­dent Barack Obama and House Speaker John Boehner. (AP Photo/J. Scott Applewhite)

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON (AP) — Repub­li­cans pulled out of debt-reduction talks led by Vice Pres­i­dent Joe Biden with a flour­ish on Thurs­day, blam­ing Democ­rats for demand­ing tax increases as part of a deal rather than accept­ing more than $1 tril­lion in cuts to Medicare and other gov­ern­ment programs.

“Let me be clear: Tax hikes are off the table,” said House Speaker John Boehner, R-Ohio.

Boehner spoke shortly after the House GOP second-in-command, Major­ity Leader Eric Can­tor, announced he would not attend a planned nego­ti­at­ing ses­sion and said it is “time for Pres­i­dent Obama to speak clearly and resolve the tax issue.”

White House spokesman Jay Car­ney quickly obliged, while announc­ing that the talks were “in abeyance.” He said Obama sup­ports a “bal­anced approach” to debt reduction.

“I would point that the pres­i­dent sup­ports a bal­anced approach,” Car­ney said. “He does not sup­port an approach that pro­vides for a $200,000 tax cut for mil­lion­aires and bil­lion­aires paid for by a $6,000 a year hike in expenses and costs for seniors.”

Numer­ous offi­cials have said in recent days that Obama and Boehner would soon take a more pub­lic role in the nego­ti­a­tions, as time grows short for con­fronting polit­i­cally vex­ing ques­tions over taxes and Medicare and other ben­e­fit programs.

As a result, it appeared that the day’s events marked an erup­tion of polit­i­cal maneu­ver­ing rather than a blow-up that would jeop­ar­dize the suc­cess of negotiations.

“The goal of these talks was to report our find­ings back to our respec­tive lead­ers,” Biden said in a state­ment. “The next phase is in the hands of those lead­ers, who need to deter­mine the scope of an agree­ment that can tackle the prob­lem and attract bipar­ti­san sup­port. For now the talks are in abeyance as we await that guidance.”

In gen­eral, the nego­ti­a­tions are aimed at pro­duc­ing leg­is­la­tion to cut future deficits while simul­ta­ne­ously lift­ing the $14.3 tril­lion limit on Trea­sury borrowing.

Trea­sury Sec­re­tary Tim Gei­th­ner has said that with­out an increase in the debt limit by Aug. 2, the United States faces a first-ever default, with poten­tially cat­a­strophic con­se­quences for the economy.

Car­ney told reporters that Boehner had met unan­nounced with Obama at the White House Wednes­day evening. The meet­ing was at the president’s ini­tia­tive, and the first known encounter between the two men since their widely pub­li­cized round of golf last weekend.

Nor was it likely Democ­rats were taken by sur­prise by the day’s events, since Can­tor informed Biden of his plans before mak­ing any pub­lic announcement.

Adding to the intrigue, one GOP lead­er­ship aide said Can­tor did not inform Boehner of his plan to with­draw from the talks until shortly before he did so. Nor was Can­tor aware of Boehner’s trip to the White House the evening before, this aide said.

For his part, Can­tor said the secre­tive Biden-led talks had “estab­lished a blue­print” for agree­ment on sig­nif­i­cant cuts in spend­ing, but had reached an impasse because of the Demo­c­ra­tic demand for taxes.

Sen. Jon Kyl of Ari­zona, the other Repub­li­can par­tic­i­pant, also said he would not attend the sched­uled ses­sion, and Sen­ate Repub­li­can leader Mitch McConnell spoke in unusu­ally bit­ing terms of Demo­c­ra­tic demands for new gov­ern­ment spend­ing as part of a debt-reduction deal.

“What planet are they on?” McConnell won­dered aloud.

While accept­ing a need to raise the debt limit, Boehner has said that deficit cuts must exceed the size of any increase in bor­row­ing author­ity — a posi­tion that nei­ther Obama nor any other Demo­c­rat has challenged.

The pres­i­dent and Biden were meet­ing with House Demo­c­ra­tic lead­ers at the White House when Can­tor made his announcement.

One of the Demo­c­ra­tic nego­tia­tors, Rep. Chris Van Hollen of Mary­land, said at a news con­fer­ence that Repub­li­cans “are play­ing with fire and really putting the very frag­ile econ­omy at greater threat by play­ing the games that we’ve been seeing.”

In sev­eral weeks of talks, Biden and con­gres­sional nego­tia­tors had largely com­pleted a review of the fed­eral bud­get, focus­ing at first on areas where the two sides were amenable to cuts.

They quickly iden­ti­fied higher pen­sion con­tri­bu­tions for fed­eral employ­ees as one area of sav­ings, and cuts in farm pro­grams and stu­dent loan sub­si­dies as oth­ers. Addi­tional items include a fed­eral auc­tion of parts of the spec­trum and the sale of sur­plus fed­eral prop­erty. Dis­cre­tionary pro­grams, which bore the brunt of an ear­lier agree­ment to cut spend­ing by $38 bil­lion, would be tick­eted for addi­tional cuts.

Other steps had been dis­cussed to rein in future gov­ern­ment spend­ing auto­mat­i­cally if deficit tar­gets were not reached.

But in recent days, offi­cials said, the two sides were increas­ingly at an impasse, with Democ­rats demand­ing higher taxes to accom­pany spend­ing cuts, while Repub­li­cans ruled out tax hikes and pushed for deeper cuts in ben­e­fit programs.

The con­flicts long pre­date the cur­rent negotiations.

Repub­li­cans long ago branded them­selves as the party of lower taxes, while Democ­rats, look­ing to the 2012 elec­tions, are already cam­paign­ing hard against a new Repub­li­can plan to turn Medicare into a sys­tem of pri­vate insur­ance cov­er­age begin­ning with any­one cur­rently under 55 years of age.

Pri­vately, Repub­li­cans bris­tle at the sug­ges­tion that taxes be traded off for Medicare. They argue that offi­cial reports make it clear that with­out sig­nif­i­cant changes, the Medicare pro­gram is finan­cially unsustainable.

Yet polls show that while there is gen­eral sup­port for spend­ing cuts, there is oppo­si­tion to ben­e­fit cuts in Medicare.

The imper­a­tive to cut spend­ing has gained impe­tus since Repub­li­cans won con­trol of the House last fall, ben­e­fit­ing hugely from tea party activists demand­ing a smaller and less intru­sive government.

In addi­tion, sput­ter­ing recov­ery from the worst reces­sion in decades and stub­bornly high unem­ploy­ment have helped form a bipar­ti­san agree­ment that long-avoided steps are needed to reduce fed­eral red ink.

The Con­gres­sional Bud­get Office warned on Wednes­day that unless steps are taken to rein in deficits, the coun­try risks a “sud­den fis­cal cri­sis,” with investors los­ing faith in the U.S. government’s abil­ity to man­age its fis­cal affairs.

Posted by AP News on Jun 24 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.