Eric Cantor and Jon Kyl Pull Out Of Biden's Budget Deficit Talks-Boehner Backs Them Up

In December, the Democrats agreed to a last-minute deal which will preserve the tax rates established under the Bush administration for at another two years. Only six-months later they are insisting on raising taxes as part of the SHMOTUS' deficit reduction talks. Their insistence on raising taxes has caused an impasse in the talks and as a result House Majority Leader Cantor has quit the talks. He believes the only way to get through this impasse is for the president and the speaker to get involved. Cantor's exit from the talks was quickly followed with the exit of Senator Jon Kyl leaving no Republicans involved with the budget cutting talks.

"We've reached the point where the dynamic needs to change,'' Mr. Cantor said. "It is up to the president to come in and talk to the speaker. We've reached the end of this phase. Now is the time for these talks to go into abeyance."

Still, Mr. Cantor remained optimistic about the prospects for a deal. He said the Biden group had already made significant progress and had tentatively identified more than $2 trillion in spending cuts over the next 10 years. But he said there could be no agreement on an overall package without breaking the impasse between Republicans' refusal to accept any tax increase, and Democrats insistence that some tax increases be part of the deal.

"We have to get over this impasse on taxes," he said. "The utility of these talks has been building the specifics. The groundwork has been laid, the blue print is there, we have a vision of the agreement."

Time is running out for an agreement, which must be passed prior to August 2, in order for there to be enough support generated for raising the debt limit.

The $14.29 trillion debt limit was breached on May 16, although Treasury officials have said they have the ability to juggle assets to delay the possibility of the U.S. defaulting on its debts until Aug. 2 at the latest.

In the Senate there is also broad GOP opposition to a tax increase:

"Taxes aren't going to be raised in what I hope will be a large and significant package that will make a difference for our country," Mr. McConnell said Wednesday at a breakfast hosted by the Christian Science Monitor. "If they couldn't raise taxes when they owned the government, you know they can't get it done now," he said referring to the Democratic lawmakers.

The left wing of the Democratic party was furious over the deal to extend the Bush-era taxes reached in December, and were also extremely unhappy with the spending deal reached to fund the federal government through the remaining months of fiscal 2011—an agreement that saw cuts to many domestic programs important to the party.

Maybe that why Senator Jon Kyle just announced that he too will also drop out of the debt talks, a source within his office confirms today. The Arizona Republican’s office will issue a formal statement shortly.

Speaker Boehner has backed up Cantor's dismissal of a tax increase.  At his weekly press conference this morning,  Boehner said Democrats must abandon any tax increases if negotiations on deficit reduction and an increase in the debt limit are to continue. And he added that  no tax hike would pass the Republican-controlled House of Representatives.

"I understand his frustration," said Boehner. "I understand why he did what he did... I've talked to the majority leader about these talks. I know the frustration he feels when Democrats insist on bringing tax hikes."

How would Boehner fill the chasm now that Cantor and Kyl are out? "I would expect to hear from" the White House, he said. Would he call them? Next question.

Boehner amplified Cantor's main point -- there would be no deal with tax increases.

"They [Democrats] want more stimulus spending and higher taxes," he said. "We have been clear. Tax hikes are off the table. A tax hike cannot pass the U.S. House of Representatives... these conversations could continue if they take the tax hikes out of the conversation."

The Republican stand is also reflective of the will of the American People. The latest Bloomberg poll reports that 55 percent of Americans believe that cutting taxes, along with slashing spending, is necessary to give businesses confidence to start hiring again


This impasse proves we’re still very far from the point at which any Progressive Democrat is going to be willing to vote for long-term fiscal prudence, instead they look to pass blame back on the voters in the form of tax increases. Their insistence on increasing taxes and demonizing any attempt to reign in entitlement spending dooms the United States to a horrible economic future.

INSANE!!! Democrats Fight For New Stimulus As Part of Deficit Reduction Plan

It has become painfully obvious that the collective leadership of the Democratic Senate has taken one too many acid trips. Face it, that can be the only explanation for their latest folly.  The day after it was reported that the 2009 stimulus plan had little or no effect on ending the "great recession," and the same day the Congressional Budget Office painted a dire picture of America's economic future due to massive debt, the geniuses in the Democratic leadership have decided they want a stimulus as part of the deficit-reduction package being negotiated by Vice President Biden and six members of Congress. It makes no sense, lets waste more money in our save money program?

No formal proposal will be tabled in the session of the talks to be held Wednesday by Sens. Max Baucus (D-Mont.) or Daniel Inouye (D-Hawaii). The group is still reviewing various stimulus proposals and is not "wedded" to any one, Sen. Charles Schumer (D-N.Y.) told reporters.

Ah Little Chuckie Schumer is involved, he must think it will get him some extra time in front of a camera.

As part of deficit reduction, we can have job creation embedded as part of the deficit-reduction package. That’s what we are asking today,” he said.

"We're recommending to the Biden deficit commission that they put jobs as part of what they're doing to help stimulate the economy, because, I repeat, cutting is only part of the game," Senate Majority Leader Harry Reid (D-Nev.) said. He said that he was instructing committee chairs to hold hearings in the coming weeks and come up with ideas by Aug. 1-- the eve of the debt ceiling deadline.

Clearly these Senators have not talked to anyone in business. The issue behind the lack of jobs is not stimulus. It is the administrations full on assault on business, from higher energy and health care costs to the new and sometimes confusing regulations.

Schumer said extending or expanding the payroll tax reduction enacted in the December 2010 tax cut deal between the White House and Congress is high on the list. Infrastructure spending and support for clean energy are other possible Democrat demands.

In other words more "stuff" that doesn't work. As we reported yesterday, based on the numbers the stimulus had little or any role in ending the recession.

The chart below shows that the recession had pretty much bottomed out by the time the stimulus bill was signed.



According to economists,  the recession officially ended in June 2009. Only 15% of the stimulus dollars had been spent by that date, so its safe to say very little of those funds had anything to do with getting us out of the recession.

He told reporters that if the stimulus cannot be included in the package by Aug. 2, Democrats want it passed simultaneously. Democrats plan to launch a yearlong "Jobs First" campaign to pressure the GOP on job creation in September, he said.

Senate Majority Whip Dick Durbin (D-Ill.) said Senate Majority Leader Harry Reid (D-Nev.) has spoken to the President and the SCHMOTUS about including a new stimulus in the deficit reduction plan and not surprisingly they are open to it.

“We just made the formal proposal; we have been talking to them for a long time,” he said. “The Republicans are fixating on the deficit and it is a serious problem.”

It became even a more serious problem today as the new CBO report on long term debt, released today warned of economic doom for America if the deficit isn't reduced...fast!

Durbin said that he hopes Congress will raise the debt limit enough so that another increase is not necessary before the 2012 elections, but he is not sure Biden can get an agreement that would secure that.

“I think we can do it in two steps,” he said. He said that the $4 trillion in deficit reduction over 10 years that is needed likely will not be agreed to by Aug. 2.

By any rational measurement another stimulus right now is a lame-brained plan, adding it to a deficit reduction plan is even crazier, but another stimulus plan added to  deficit reduction plan after an unsuccessful attempt to turn around the economy with a similar stimulus plan is pure lunacy. Or as Albert Einstein once said,  “Insanity is doing the same thing over and over and expecting a different result.”