Taxes take top Repub­li­cans out of deficit talks

The Washington Times Weekly - - Politics - BY SEAN LENGELL

Repub­li­can ne­go­tia­tors walked away from bi­par­ti­san deficit re­duc­tion talks be­tween Congress and the White House on June 23, say­ing the bar­gain­ing ses­sions had reached an im­passe over tax in­creases Democrats are in­sist­ing must be part of any even­tual deal.

House Ma­jor­ity Leader Eric Can­tor of Vir­ginia and Sen. Jon Kyl of Ari­zona, two top GOP mem­bers on a six-mem­ber con­gres­sional del­e­ga­tion that had been meet­ing reg­u­larly with Vice Pres­i­dent Joseph R. Biden, said Pres­i­dent Obama must now get per­son­ally in­volved if the con­ver­sa­tions are go­ing to go any fur­ther.

“Each side came into these talks with cer­tain or­ders, and as it stands the Democrats con­tinue to in­sist that any deal must in­clude tax in­creases,” Mr. Can­tor said in a pre­pared state­ment.

The move ex­ac­er­bates the ten­sion and raises the po­lit­i­cal stakes for both sides to cut a deal on spend­ing ahead of what the ad­min­is­tra­tion says is an early Au­gust dead­line to raise the fed­eral bor­row­ing limit and avoid what could be a cat­a­strophic de­fault on the gov­ern­ment’s debts.

White House press sec­re­tary Jay Car­ney said the pres­i­dent is pre­pared to take a more ac­tive role in work­ing with Capi­tol Hill to reach a deal, and played down the no­tion that talks had ground to a halt.

“It is al­ways been the case that these talks would pro­ceed to a point where the re­main­ing ar­eas of dis­agree­ment would be ad­dressed by [con­gres­sional] lead­ers and the pres­i­dent,” he said.

Mr. Biden said it was time for con­gres­sional party lead­ers to push the talks for­ward.

“The goal of these talks was to re­port our find­ings back to our re­spec­tive lead­ers,” the vice pres­i­dent said in state­ment re­leased in the evening. “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.”

De­spite the at-times con­fronta­tional rhetoric, there were signs the two sides were keep­ing the lines of com­mu­ni­ca­tion open.

Mr. Car­ney told re­porters that House Speaker John A. Boehner, Ohio Repub­li­can, had met unan­nounced with Mr. Obama at the White House on June 22. The meet­ing was at the pres­i­dent’s ini­tia­tive, and the first known en­counter be­tween the two men since their widely pub­li­cized round of golf the pre­vi­ous week­end.

There were no de­tails on what the two men dis­cussed.

Mr. Obama had de­manded the high-level ne­go­ti­a­tions in April, and charged the panel with com­ing up with bud­get re­forms that Congress will ac­cept in ex­change for rais­ing the gov­ern­ment’s debt ceil­ing. Repub­li­can lead­ers, pressed by a large con­tin­gent of new tea party-al­lied mem­bers, have de­manded ma­jor spend­ing cuts and re­forms as their price for agree­ing to an­other debt ceil­ing hike.

The talks are be­ing con­ducted be­hind closed doors and even party lead­ers said they are not privy to all the de­tails be­ing dis­cussed, though the out­lines are clear: Repub­li­cans say the fed­eral red ink should be re­duced through spend­ing cuts, while Democrats ar­gue tax in­creases should also be on the ta­ble.

Af­ter 11 meet­ings, Repub­li­cans said the talks have gone as far as they can with­out Mr. Obama be­com­ing per­son­ally in­volved.

Mr. Can­tor said the group has made progress iden­ti­fy­ing “tril­lions in spend­ing cuts” and “es­tab­lished a blue­print that could in­sti­tute the fis­cal re­forms needed to start get­ting our fis­cal house in or­der.” He also praised Mr. Biden’s “lead­er­ship in bring­ing us this far.”

But he and Mr. Boehner said tax hikes that Democrats are propos­ing are a non-starter be­cause they can never pass the House, which the GOP con­trols.

“Those talks could con­tinue, if they’re will­ing to take the tax hikes off the ta­ble,” Mr. Boehner told re­porters.

Mr. Kyl agreed any deficit-re­duc­tion pro­posal fea­tur­ing new spend­ing and higher taxes wouldn’t be sup­ported by his GOP col­leagues.

“Pres­i­dent Obama needs to de­cide be­tween his goal of higher taxes or a bi­par­ti­san plan to ad­dress our deficit. He can’t have both,” said Mr. Kyl in a state­ment is­sued jointly with Se­nate Mi­nor­ity Leader Mitch McCon­nell, Ken­tucky Repub­li­can. “We need to hear from him.”

Democrats ac­cused Repub­li­cans of aban­don­ing the talks at a crit­i­cal mo­ment.

“Al­though there is no doubt that there were some very dif­fi­cult is­sues that needed to be de­cided,” said Rep. Chris Van Hollen, a Mary­land Demo­crat and mem­ber of the Biden group. “The speaker of the House said it was time for an adult mo­ment. Adult mo­ments mean it’s time for mak­ing tough de­ci­sions.”

The Biden panel has been try­ing to ham­mer out a deal to raise the nation’s $14.3 tril­lion debt ceil­ing — the legal limit that the fed­eral gov­ern­ment can bor­row money to pay for its op­er­a­tions and debt obli­ga­tions.

Con­gres­sional lead­ers of both par­ties, along with the White House, econ­o­mists and Wall Street agree the debt ceil­ing must be raised. Ex­ceed­ing the limit could lead to a U.S. de­fault on its loans, a sce­nario that would dam­age the nation’s credit rat­ing and could trig­ger an­other fi­nan­cial cri­sis.

Repub­li­cans, in ad­di­tion to not want­ing taxes raised, say any deal must in­clude spend­ing cuts that ex­ceed the amount the ceil­ing is raised — at least $2 tril­lion.

Democrats ar­gued they have been will­ing to com­pro­mise on many GOP spend­ing cut de­mands, and ac­cused Repub­li­cans of “play­ing chicken with the econ­omy.”

“This is not the time to be giv­ing up on our econ­omy,” said Se­nate Ma­jor­ity Leader Harry Reid, Ne­vada Demo­crat. “It ap­pears [Repub­li­cans] have given up. [. . . ] Democrats are not go­ing to give up on the Amer­i­can peo­ple.”

House Mi­nor­ity Leader Nancy Pelosi, Cal­i­for­nia Demo­crat, bris­tled at the Repub­li­cans’ por­trayal of their tax po­si­tion, sug­gest­ing that only the cor­po­rate world — not av­er­age Amer­i­cans — would pay more.

“Yes, we do want to re­move tax sub­si­dies for big oil. We want to re­move tax breaks for cor­po­ra­tions that send jobs over­seas. The list goes on,” Ms. Pelosi said. “I don’t know if that’s a rea­son to walk away from the ta­ble when we’re try­ing to find a bal­anced ap­proach.”

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