WASHINGTON — Budget talks led by Vice President Joe Biden blew up yesterday as Republicans quit the negotiations rather than agree to Democratic tax increases.
The startling walkout cast doubt on President Obama’s ability to strike a deal to increase the $14.3 trillion debt limit by Aug. 2, when the country potentially faces a catastrophic credit default.
“Regardless of the progress that has been made, the tax issue must be resolved before discussions can continue,” said House Majority Leader Eric Cantor (R-Va.) in announcing his pullout from the talks.
Republicans called on Obama to personally intervene and revive the stalled negotiations by giving up the tax demand.
“President Obama needs to decide between his goal of higher taxes or a bipartisan plan to address our deficit,” Senate Republican leaders said in a statement.
It’s now up to Obama and House Speaker John Boehner (R-Ohio) to strike a deal in time.
“Let me be clear: Tax hikes are off the table,” Boehner declared after the talks collapsed.
White House Press Secretary Jay Carney said Obama would keep pushing for a “balanced approach” of spending cuts and tax increases.
“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,” Carney said.
He said Boehner and Obama met secretly Wednesday night at the White House, a promising sign of improved relations between the political foes following their widely publicized golf outing last weekend.
Before yesterday, the bipartisan team of negotiators had insisted they were making steady progress and could reach a deal as soon as next week.
They identified about $2 trillion in spending cuts. But they remained at odds over Republican demands to reform Social Security and Medicare, as well as Democratic demands for tax increases on wealthy Americans, oil companies and other target groups.