POLITICS

Virginia's Cantor pulls out of deficit talks

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"Revenues must be included so everyone can participate in addressing a critical national problem," Baucus said.

Cantor said that once the tax issue is solved, negotiators could quickly seal agreement.

"It is time for the president to speak clearly and resolve this tax issue," Cantor said. "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."

The Biden-led group has been meeting since early May, trying to come up with areas of agreement on curbing a budget deficit that's requiring the government to borrow more than 40 cents of every dollar it spends. Areas of tentative agreement include trimming farm subsidies, auctioning electromagnetic spectrum to communications companies, and cutting student loan subsidies.

But with Republicans unwilling to accept some higher taxes - even in the wake of a sweeping Senate vote to eliminate the ethanol tax subsidy - Democrats were unwilling to agree to tougher steps like curbing Medicare and Medicaid.

All along, it was anticipated that the Biden group would only be able to get so far and that the toughest decisions, such as taxes and cuts to federal health care programs, would be kicked upstairs to Obama and House Speaker John Boehner, R-Ohio. That duo sealed agreement in April on legislation to fund the government through the end of September.

"I would to expect to hear from (Obama)," Boehner said Thursday. Of Cantor's decision, Boehner said: "I understand why he did what he did. I think those talks could continue if they're willing to take the tax hikes off the table."

There are only 5 ½ weeks remaining until an Aug. 2 deadline for enacting an increase in the nation's debt limit to prevent a U.S. default. Economists warn that could damage the nation's credit rating and force the government to pay higher interest rates to continue to borrow the $125 billion a month it needs to finance its operations.

But increasing the borrowing cap is a politically poisonous vote for lawmakers, especially the tea party-backed Republicans controlling the House. Even while there's agreement between Obama and top congressional leaders that the debt cap simply has to be raised, a majority of the public - especially core conservative GOP supporters - says the debt limit shouldn't be lifted.

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