With Debt Talks Stalled Over Taxes, It’s Up to Obama and Boehner

BY Beth Summers  June 24, 2011 at 7:36 AM EDT

President Obama and House Speaker John Boehner. File photo by Saul Loeb/AFP/Getty Images.

The Morning Line

With five weeks to go before the U.S. government could begin defaulting on its financial obligations, it’s now up to President Obama and House Speaker John Boehner, R-Ohio, to settle the differences between their two parties over raising the $14.3 trillion debt ceiling.

The burden was shifted to the president and the speaker after House Majority Leader Eric Cantor, R-Va., and Senate Minority Whip Jon Kyl, R-Ariz., the two GOP lawmakers involved in the negotiations led by Vice President Joe Biden, withdrew from the process, citing the Democrats’ insistence that tax hikes be part of any deal.

As a result, Thursday’s scheduled meeting didn’t happen, leaving many wondering what would happen next.

Congressional Republicans then called on President Obama to get involved directly in the talks.

White House Press Secretary Jay Carney confirmed Thursday that President Obama and Speaker Boehner had met secretly at the White House Wednesday night to follow up on “conversations they had on the golf course on Saturday,” but he would not provide specifics of what was discussed.

Vice President Biden released a statement Thursday evening noting the handover of deal-making responsibilities.

“As all of us at the table said at the outset, the goal of these talks was to report our findings back to our respective leaders. 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,” Vice President Biden said. “For now the talks are in abeyance as we await that guidance.”

Senate Majority Leader Harry Reid, D-Nev., said he expected to join the president and the speaker at the bargaining table to hammer out the legislative framework to raise the borrowing limit and find trillions of dollars in cuts to the deficit, although he didn’t seem to relish his new-found responsibility when talking with reporters Thursday.

“With what Kyl and Cantor’s done, I think it’s in the hands of the speaker and the president and, sadly, probably me,” Sen. Reid said.

The Republicans insisted they were ready to get back to work — as soon as the president conceded that raising taxes was off the table.

Speaker Boehner said Rep. Cantor had made it clear to the vice president that “these conversations could continue if they take the tax hikes out of the conversation.”

In a joint statement, Senate Minority Leader Mitch McConnell, R-Ky., and Sen. Kyl said: “President Obama needs to decide between his goal of higher taxes, or a bipartisan plan to address our deficit. He can’t have both.”

The vice president said on Thursday that the White House remains committed to a “balanced approach.”

“As the President and I have made clear from the beginning, the only way to make sure we begin to live within our means is by coming together behind a balanced approach that finds real savings across the budget – including domestic spending, defense spending, mandatory spending, and loopholes in the tax code,” Vice President Biden said. “We all need to make sacrifices, and that includes the most fortunate among us.”

Before the two sides can resolve the issue of tax increases, they’ll need to determine whether eliminating tax breaks or closing tax loopholes to generate more revenue meets the definition of an increase. Until that question is resolved, the seats at the negotiating table are likely to remain empty.

DECISION DAY IN THE HOUSE ON LIBYA

The U.S. House of Representatives will vote Friday on two separate measures on Libya, one which would authorize the U.S. military operation and another that would only allow money to be used for support functions and not missile strikes.

According to Russell Berman and Molly K. Hooper of the Hill newspaper, the measure to defund certain operations is likely to pass, which would heighten tension among the White House and the House Republicans and liberal Democrats who oppose U.S. involvement in Libya.

Speaker Boehner said he was bringing up the votes because Congress needed to exercise its voice in the debate after President Obama had left them out of the loop over military involvement.

“I believe, and most of my colleagues believe, that the president have failed to make his case as to why we have engaged Libya,” Rep. Boehner said Thursday. “Because of the president’s failure to consult with the Congress, failure to outline to the American people why we are doing this before we engaged in this, puts us in the position where we have to defend our responsibilities under the Constitution.”

On Thursday, Secretary of State Hillary Clinton was on Capitol Hill to convince Democrats to back the president and not vote to defund any operations in Libya.

Jennifer Steinhauer of the New York Times reports that Clinton told attendees that passing the restricted funding bill would be disastrous for American interests in the country.

Opposition to U.S. involvement stretches from anti-war Democrats, like Rep. Dennis Kucinich of Ohio, to Republicans in the Boehner camp, who think President Obama didn’t sufficiently consult Congress on the decision.

A vote to restrict funding for certain operations in Libya would most likely be symbolic, because the Senate is not likely to pass such a measure. Instead, the Senate may consider a measure introduced by Sens. John Kerry, D-Mass., and John McCain, R-Ariz., to authorize the ongoing operations in Libya for one year, an effort that has the potential to pass the chamber.

RON PAUL’S POLL POSITION

Texas Rep. Ron Paul was the big spender Thursday when it came time to bid on lots for August’s Iowa GOP Straw Poll. Newt Gingrich, meanwhile, decided against opening his campaign wallet for a prime piece of pre-caucus real estate.

At $31,000, Rep. Paul had the high bid, earning him the rights to the space occupied by Mitt Romney in 2007.

Romney won the event the last time around, but he went on to finish second Mike Huckabee in the 2008 GOP caucuses four months later. Romney has said he will not participate in any straw polls during the 2012 campaign.

The Des Moines Register’s Jason Clayworth reports the bidding event took an unusual twist when one candidate refused to be identified, prompting representatives for the other contenders to walk out on the process.

The matter was resolved after Michigan Rep. Thaddeus McCotter, who recently suggested he is considering a run, agreed to be named.

Minnesota Rep. Michele Bachmann, Herman Cain, Tim Pawlenty and Rick Santorum also purchased lots Thursday.

Bidding for the sites started at $15,000.

A Gingrich spokesman told Clayworth that the decision to pass on a lot purchase reflected the campaign’s grassroots strategy, not a campaign in trouble.

“We’re not going to have the type of financial resources some others will have,” R.C. Hammond told Clayworth. “That’s not the type of campaign we will run. We will work to turn people out, not because we have an air conditioned tent but because we have good ideas.”

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