Negotiations over federal budget cuts and the nation’s $14.3 trillion debt limit begin anew Monday at the White House, when President Obama personally enters the talks after bipartisan negotiations led by Vice President Biden collapsed last week. Obama, personally intervening in the budget talks for the first time, will meet separately Monday with Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., “to discuss the status of the negotiations to find common ground on a balanced approach to deficit reduction,” the White House said in a statement.
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The two parties are at odds over how to rein in the deficit, which they agree is necessary to counterbalance a request by Treasury Secretary Tim Geithner to boost the nation’s borrowing power by $2 trillion.
The two Republican lawmakers involved in the Biden talks, Sen. Jon Kyl of Arizona and Rep. Eric Cantor of Virginia, walked out of the negotiations last week after Democrats insisted that any deficit-reduction formula include new taxes on oil companies, corporate jet owners and those earning $500,000 a year or more.
“There is not support in the House for a tax increase, and I don’t believe now is the time to raise taxes in light of our current economic situation,” Cantor said.
Republicans insist that the deficit be reduced entirely through budget cuts.
With the talks now elevated to top congressional leaders and the Oval Office, the pressure is on McConnell and House Speaker John Boehner, R-Ohio, who are being watched closely by their conservative base. Conservatives, including the influential Tea Party, want record cuts of $4 trillion in exchange for raising the debt ceiling by the Aug. 2 deadline.
If the limit isn’t raised, the United States could default on its debt.
Sen. Jim DeMint, R-S.C., one of the chamber’s most fiscally conservative lawmakers and a Tea Party mentor, warned that any Republican who votes to increase the debt limit without substantial budget cuts would be “gone” from office in next year’s elections.
“It would be the most toxic vote,” DeMint told ABC News. “I can tell you if you look at the polls, Democrats, Republicans, independents, they do not think we should increase the debt limit.”
Boehner has not yet been invited to talk to Obama but is likely to get his turn soon. House Republicans want Boehner to avoid the kind of deal he cut earlier this year with Obama to avert a government shutdown. Boehner settled for about $38 billion in cuts, far less than many Republicans were demanding.
“It remains to be seen,” Rep. Jeff Flake, R-Ariz., told The Washington Examiner when asked if Boehner would meet GOP expectations on cuts.
Sen. Charles Schumer, D-N.Y., said the GOP “is in complete disarray” over the cuts and claimed Cantor walked out of the talks because he “didn’t want his fingerprints” on the compromise deal that will eventually be required.
In leaving the difficult negotiation to the House speaker, Cantor “threw Boehner under the bus,” said one Democratic aide.
But Rep. Trey Gowdy, R-S.C., said he is confident Boehner will cut a deal he can get behind.
“I’m not worried,” Gowdy told The Examiner. “I think the rift between Speaker Boehner and Mr. Cantor is imaginary. I haven’t seen any evidence of that at all.”
