GOP's Cantor pulls out of bipartisan budget talks

Biden debt talks hit impasse, Republicans walk out

http://news.yahoo.com/s/nm/us_usa_debt_cantor

WASHINGTON (Reuters) – U.S. budget talks hit an impasse on Thursday after a both Republicans walked out, throwing doubt on Washington's ability to reach a deal that would allow America to continue borrowing and avoid a debt default.

Representative Eric Cantor, the No. 2 Republican in the House of Representatives, said participants had identified trillions of dollars in potential spending cuts but were deadlocked over tax increases that Democrats want.

"Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue," he said in a statement.

Republican Senator Jon Kyl also left the talks, an aide said.

House Speaker John Boehner said Democrats must abandon any tax increases for negotiations to continue.

"These conversations could continue if they take the tax hikes out of the conversation," Boehner said. He added tax increases could never pass the Republican-controlled House in any event.

Negotiators had hoped to reach a budget deal by next week that would give lawmakers the political cover to raise the $14.3 trillion debt ceiling before the Treasury Department runs out of money to pay the country's bills.

Default could occur if Congress does not act by August 2, pushing the United States back into recession and sending markets plunging around the globe.

So far, worries of a possible default haven't affected bond markets as investors focus on other news and assume that Washington will ultimately strike a deal. But that probably won't come until the last minute, analysts said.

"I just think that at the end of the day that (the markets) still don't believe that anything could remotely happen in that respect," said James Combias, head of government bond trading at Mizuho Securities in New York, of the prospect of default.

The talks are "not dead but they are on life support," said Greg Valliere, a political analyst for investors at Potomac Research Group. "This is going to look ugly for the next few weeks."

Cantor's announcement caught Democrats by surprise, coming as President Barack Obama met with House Democratic leaders at the White House.

Congressional aides said they did not know whether the remaining negotiators, led by Vice President Joe Biden, would go ahead with the next meeting, scheduled for 2 p.m. EDT.

Cantor said that Obama must "speak clearly and resolve the tax issue." Aides familiar with the talks have said that a final deal will have to be struck between Obama and Boehner, not their deputies.

Democratic lawmakers reacted cautiously.

"That's too bad," Senate Democratic Leader Harry Reid said when reporters told him the news.

Aides were less circumspect. "When the going gets tough, Cantor gets going," one said.

Another said Cantor recognizes that tax increases will have to ultimately be part of any deal but that he didn't want to be the one to say so. "Cantor just threw Boehner under the bus," the aide said.

Electric_Delta wrote:

gimmesometruth27 wrote:

Electric_Delta wrote:

I stopped reading after your first sentence.

The debt this administration has racked up is what will unwind us....and is.

fine bury your head in the sand.

the problem right now is not the debt, the problem is how you want to go about getting rid of it.

if i was obama i would call them on it. i do not think the gop wants to go down in the history book as the party that let the debt ceiling expire causing us to go back into a recession all because they wanted to keep tax cuts for rich people.

That's not the GOP position and you know it. Are you suggesting we combat the debt solution with...more debt? Inexcusable.

that is exactly the gop position. cut entitlements and refuse to meet until raising taxes are off the table.

the 2 articles i posted said exactly that. cantor and kyl will not meet until raising taxes on the rich is off the table. they would rather not vote at all and let the country go further down the toilet than have to vote to increase taxes on their rich base.

cincybearcat wrote:

gimmesometruth27 wrote:

tax cuts for rich people.

The most overused, fear tactic of them all.

besides what? "death panels"?

or how about "government takeover of healthcare".

or even "obama is a socialist who is going to indoctrinate your kids on the first day of school with his evil televised speech to kids".

Jason P wrote:

cincybearcat wrote:

gimmesometruth27 wrote:

tax cuts for rich people.

The most overused, fear tactic of them all.

Perhaps not a fear tactic, but it's a tactic that the Dems try to use to get overall support for raising taxes. "Don't worry, we just want the evil Monopoly Man's money, that's all. Come on, let's raise taxes!" To which a bunch of people start to think it's actually a good idea to raise taxes! :crazy:

the tactic of giving the rich, aka "job creators" a free pass is over. it is a failed experiment, where are the jobs after nearly 10 years of bush's tax cuts?